Contracts
A Michigan purchase agreement includes an inspection contingency. The buyer's inspector finds a cracked foundation. The buyer then must:
AAccept the property as-is under the inspection contingency
BExercise their contingency rights as specified (request repair, renegotiate, or cancel)✓ Correct
CAutomatically receive their earnest money back
DSue the seller for non-disclosure
Explanation
Upon discovering a defect during inspection, the buyer must act within the contingency terms — typically requesting repairs, negotiating a price reduction, or canceling the contract and receiving their earnest money back.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
ContingencyA 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.
Math Concepts
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