Contracts
In New Mexico, what is a 'hold harmless' clause in a real estate transaction?
AA clause preventing lawsuits against the NMREC
BA clause where one party agrees not to hold the other party responsible for certain risks or damages✓ Correct
CA clause fixing the commission rate
DA clause requiring buyer's agent to hold funds
Explanation
A hold harmless (indemnification) clause is an agreement where one party releases another from liability for certain damages. In real estate, they are common in lease agreements and some purchase contracts.
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Key Terms to Know
Buyer's Agent
A real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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