Contracts
In New Mexico, when the buyer's lender requires specific repairs before funding the loan, and the seller refuses to make those repairs, the most likely outcome is:
AThe buyer must proceed regardless
BThe transaction fails unless an alternative resolution is reached (price reduction, buyer making repairs, etc.)✓ Correct
CThe lender makes the repairs themselves
DThe NMREC mediates the dispute
Explanation
If repairs are required for financing and the seller refuses, the parties must find an alternative (like a price reduction or credit in lieu of repairs) or the deal falls through due to the failed financing contingency.
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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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
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.
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