Contracts
A Washington purchase agreement included an environmental contingency allowing the buyer 15 days to review an environmental report. On day 14, the buyer receives a Phase I ESA showing a recognized environmental condition. The buyer may:
AOnly negotiate a price reduction
BTerminate the contract within the contingency period and receive their earnest money back✓ Correct
CWaive the issue because it has not been confirmed as actual contamination
DExtend the contingency indefinitely at their discretion
Explanation
Within an environmental contingency period, a buyer who discovers unfavorable environmental information (such as a recognized environmental condition in a Phase I ESA) may terminate the contract and receive their earnest money back.
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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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