Contracts
In Michigan, an 'offer to purchase and contract' that is signed by both parties and not subject to any unfulfilled contingencies is:
AMerely a letter of intent
BAn executory contract binding both parties✓ Correct
CVoid until the earnest money clears
DOnly binding once the title company confirms
Explanation
A purchase agreement signed by both parties, with all contingencies either satisfied or waived, is a binding executory contract. Both parties are legally obligated to perform their respective obligations at closing.
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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.
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