Escrow & Title
A Minnesota closing is scheduled for December 31 but must be postponed to January 3 due to a holiday. Who bears the cost of additional interest during the delay?
AThe title company covers the additional interest
BThe party who caused the delay or as negotiated between the parties✓ Correct
CThe lender always bears additional interest costs
DNeither party bears additional costs due to holiday delays
Explanation
When a Minnesota closing is delayed, the party responsible for the delay typically bears the additional costs (including per diem interest). If the delay is due to circumstances beyond either party's control (like a holiday), the purchase agreement terms govern how costs are allocated.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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