Escrow & Title
In Indiana, an 'indemnification clause' in a real estate contract protects one party by:
AGuaranteeing the title is marketable
BRequiring the other party to defend and hold them harmless against specified claims or losses✓ Correct
CEnsuring the earnest money is returned if the deal falls through
DRequiring both parties to split all transaction costs equally
Explanation
An indemnification clause requires one party to defend, compensate, and hold the other party harmless from specified losses, claims, or liabilities. These clauses are common in commercial real estate to allocate risk between parties.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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.
Math Concepts
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