Contracts
In Michigan, a buyer who discovers a material defect after the contingency period has passed:
AHas no recourse and must proceed to closing
BMay still be able to renegotiate if the defect was unknown and undiscoverable during the inspection period✓ Correct
CAutomatically receives a price reduction
DHas the absolute right to exit the contract with earnest money returned
Explanation
If a Michigan buyer discovers a previously unknown material defect after the inspection period, they may attempt to renegotiate with the seller. Whether they can exit depends on the specific contract language, the nature of the defect, and whether it was disclosed; they do not have an automatic exit right after contingency release.
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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.
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.
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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