Contracts
A buyer includes an inspection contingency in their purchase offer. After the inspection, the buyer may:
ANegotiate repairs or credits, or cancel the contract within the contingency period✓ Correct
BCancel the contract only if the seller refuses all repairs
CDemand a price reduction of up to 10%
DExtend the contingency period indefinitely
Explanation
An inspection contingency gives the buyer the right to have the property inspected and, based on the findings, to request repairs, credits, or price reductions — or to cancel the contract within the specified contingency period.
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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