Contracts
A buyer in Massachusetts includes a home inspection contingency in the Offer to Purchase. The home inspector finds significant foundation issues. The buyer may:
AOnly terminate the contract if the seller refuses all repairs
BTerminate the contract and receive their deposit back if the defects meet the contingency criteria✓ Correct
CSue the home inspector for the cost of repairs
DForce the seller to escrow repair funds at closing
Explanation
If the home inspection reveals defects that satisfy the contingency criteria (as defined in the contract), the buyer may terminate the offer and recover their deposit. The specific terms of the inspection contingency govern what qualifies as a termination trigger.
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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.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
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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