A buyer in Utah submits an offer that includes a financing contingency. During the due diligence period, the buyer is unable to obtain mortgage approval. Under the Utah REPC, what is the buyer's remedy?
Correct Answer
B) The buyer may cancel and receive a refund of earnest money if cancellation occurs before the financing and due diligence deadlines
Under the Utah REPC, if the buyer cannot obtain financing and cancels before the applicable deadlines (financing deadline and due diligence deadline), the buyer is entitled to a refund of the earnest money deposit. After those deadlines pass, the earnest money may be at risk.
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Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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Specific performance in North Dakota:
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