Contracts
A Massachusetts buyer in a P&S with a 'subject to mortgage' contingency cannot obtain financing. The seller asks to keep the deposit. The buyer can recover the deposit if:
AThe seller agrees to the return
BThe buyer made a good-faith effort to obtain financing and the contingency language allows cancellation with deposit return✓ Correct
CThe buyer finds another property to buy
DThe buyer's attorney demands it
Explanation
If the mortgage contingency was properly exercised (buyer made a good-faith effort and couldn't obtain financing within the contingency parameters), the buyer is entitled to a full deposit refund under the contract terms.
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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.
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.
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.
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