Contracts
Which clause in a Michigan purchase agreement allows the buyer to exit if they cannot obtain financing at specified terms?
AAcceleration clause
BFinancing contingency✓ Correct
CDefeasance clause
DSubordination clause
Explanation
A financing contingency (mortgage contingency) gives the buyer the right to void the contract and recover earnest money if they are unable to obtain a mortgage at the terms specified in the agreement.
People Also Study
Related Michigan Questions
- If a buyer defaults on a Michigan purchase agreement and the contract contains a liquidated damages clause, the seller:Contracts
- In Michigan, a purchase agreement with an 'inspection contingency' allows the buyer to:Contracts
- In Michigan, 'earnest money' in a real estate purchase agreement serves as:Contracts
- In Michigan, seller financing (a purchase money mortgage) means:Finance
- In Michigan, what happens to earnest money if the buyer exercises a valid contingency to exit the contract?Contracts
- In Michigan, a purchase money mortgage is one where:Finance
- In Michigan, a 'purchase money mortgage' is created when:Finance
- In Michigan, a 'hold harmless' clause in a real estate purchase agreement typically protects the broker by:Escrow & Title
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
Study This Topic
Practice More Michigan Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Michigan Quiz →