A buyer in Phoenix submits an offer on a home with a financing contingency clause stating they must secure a loan within 21 days. On day 20, the buyer's lender requests additional documentation that will delay approval by 10 days. Under Arizona law, what should the buyer do to protect their earnest money?
Correct Answer
B) Request a written extension from the seller before the contingency expires
The buyer must request a written extension from the seller before the contingency expires to protect their earnest money and maintain the contract. Option A is incorrect because extensions are not automatic regardless of cause. Option C is incorrect because buyers are not required to proceed without meeting contingencies. Option D is incorrect because properly requesting an extension or timely canceling under the contingency protects earnest money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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