Contracts
In Washington, when a real estate contract does not specify which party bears the risk of loss if the property is destroyed before closing, the Uniform Vendor and Purchaser Risk Act provides that:
AThe buyer bears all risk from the time the contract is signed
BRisk of loss remains with the seller unless the buyer has possession or legal title has passed✓ Correct
CThe risk is shared equally between buyer and seller
DThe party with insurance bears the risk
Explanation
Washington has adopted the Uniform Vendor and Purchaser Risk Act, which provides that risk of loss remains with the seller until either legal title or possession passes to the buyer. If the property is destroyed before closing (without possession transfer), the seller bears the loss.
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Key Terms to Know
Contingency
A 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.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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