Contracts
Under Wisconsin law, if both parties to a purchase agreement agree to cancel the contract, the earnest money is:
AAlways forfeited to the seller
BReturned to the buyer automatically
CDistributed according to the cancellation agreement signed by both parties✓ Correct
DHeld by the broker indefinitely
Explanation
When a Wisconsin contract is mutually cancelled, the earnest money is distributed according to the terms of a written cancellation agreement signed by all parties.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
Math Concepts
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