Tom submits a C.A.R. RPA offer on a duplex in Long Beach for $680,000. The offer specifies a 17-day inspection contingency and a 21-day loan contingency. The seller accepts without changes. On day 15, Tom's inspector finds minor cosmetic issues. Tom decides he no longer wants the property. Under the C.A.R. RPA, what is Tom's right?
Correct Answer
C) Tom can cancel for any reason during the inspection contingency period and receive a full refund of the deposit
Under the C.A.R. RPA, during the inspection contingency period, the buyer has broad rights to cancel for any reason related to the property's condition, whether major or minor. Upon timely cancellation within the contingency period, the buyer is entitled to a full refund of the earnest money deposit.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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.
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