Contracts
A contingency in a real estate contract allows a party to:
AExtend the closing date indefinitely
BAvoid all closing costs
CWithdraw from the contract without penalty if specified conditions are not met✓ Correct
DTransfer the contract to a third party
Explanation
A contingency allows a party to withdraw from the contract without forfeiting their earnest money deposit if the specified condition (such as financing approval or satisfactory inspection) is not met.
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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.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
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
Escrow Disputes
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