A buyer in Carlsbad has a C.A.R. RPA with a loan contingency. The buyer's lender requires a satisfactory appraisal as a condition of the loan. If the appraisal comes in low, which contingency protects the buyer's right to cancel?
Correct Answer
D) Both the appraisal contingency and the loan contingency may protect the buyer
Under the C.A.R. RPA, both the appraisal contingency and the loan contingency may protect the buyer when an appraisal comes in low. The appraisal contingency directly addresses appraisal shortfalls, while the loan contingency protects the buyer if the lender refuses to fund the loan due to the low appraisal.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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