Contracts
In Tennessee, a purchase contract that specifies 'closing on or before [date]' means:
AClosing must occur exactly on that date
BClosing must occur no later than that date, but may occur earlier with all parties' agreement✓ Correct
CThe buyer has until that date to apply for a mortgage
DThe contract automatically terminates if the date passes
Explanation
'Closing on or before [date]' means closing can occur anytime up to and including that date, but not after it (unless extended by mutual written agreement). Both parties must be ready to close at any time during this window.
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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.
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.
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