Contracts
In Michigan, what happens to earnest money if the buyer exercises a valid contingency to exit the contract?
AThe seller retains all of it
BIt is returned to the buyer✓ Correct
CIt is split between buyer and seller
DIt goes to the broker's operating account
Explanation
When a buyer properly exercises a valid contingency (e.g., financing contingency, inspection contingency) to exit a Michigan purchase contract, the earnest money is returned to the buyer in full.
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