An inspection contingency in a purchase contract gives the buyer the right to:
Correct Answer
B) Cancel the contract or negotiate repairs if unsatisfactory conditions are found
An inspection contingency protects the buyer by allowing them to cancel the contract or negotiate repairs or a price reduction if the home inspection reveals unsatisfactory conditions. It does not obligate the seller to make all repairs, nor does it allow the buyer to extend closing indefinitely.
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Related Topics & Key Terms
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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