Contracts
A Vermont residential purchase contract includes an inspection contingency. The buyer's inspector discovers that the roof needs replacement. The buyer may:
AOnly demand the seller make all repairs
BCancel the contract and receive the earnest money, or negotiate with the seller✓ Correct
CReduce the purchase price unilaterally
DExtend the inspection period indefinitely to get more estimates
Explanation
An inspection contingency typically gives the buyer the right to cancel the contract (and recover earnest money) if inspection results are not satisfactory, or to attempt to negotiate repairs or a price reduction with the seller.
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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.
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