Contracts
A Missouri purchase contract includes a financing contingency. If the buyer cannot obtain financing within the contingency period, the buyer:
AMust proceed with the purchase regardless
BMay terminate the contract and receive earnest money back✓ Correct
CMust pay the seller's lost commission
DIs automatically in breach
Explanation
A financing contingency protects the buyer — if the buyer cannot obtain financing within the specified period and properly invokes the contingency, they may terminate the contract and receive a refund of earnest money.
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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.
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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
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