Contracts
In a NJ residential contract, a mortgage contingency clause protects the:
ASeller if the property appraises low
BBuyer if they cannot obtain financing✓ Correct
CBroker's commission regardless of outcome
DLender against default
Explanation
A mortgage contingency clause protects the buyer by allowing them to void the contract without losing their deposit if they are unable to obtain financing under the specified terms.
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Earnest MoneyA 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.
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
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