Contracts
A North Dakota purchase offer includes a financing contingency. If the buyer cannot obtain financing and properly invokes the contingency:
AThe buyer forfeits their earnest money
BThe contract is terminated and the earnest money is returned to the buyer✓ Correct
CThe seller can sue for specific performance
DThe buyer must pay a penalty equal to 3% of the purchase price
Explanation
A properly invoked financing contingency allows the buyer to terminate the contract if they cannot obtain the specified financing. When properly exercised, the buyer is entitled to a full refund of their earnest money deposit.
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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
State-Specific Concepts
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