Contracts
A Utah Purchase Contract that contains a financing contingency protects the buyer if:
AThe property does not appraise at purchase price
BThe buyer cannot obtain the specified financing✓ Correct
CThe seller refuses to make repairs
DThe title search reveals an easement
Explanation
A financing contingency allows the buyer to cancel the contract and receive a refund of earnest money if they are unable to obtain the type and amount of financing specified in the contract within the agreed timeframe.
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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.
EasementA non-possessory right to use another person's land for a specific purpose.
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