Under the CREC-approved Contract to Buy and Sell Real Estate used in Colorado, which of the following is NOT a typical buyer contingency that, if unmet, allows the buyer to terminate and recover earnest money?
Correct Answer
D) Commission contingency — buyer's broker does not receive the agreed commission
A commission contingency is NOT a standard buyer contingency in the CREC-approved Contract to Buy and Sell Real Estate. Broker compensation is a separate matter governed by the agency agreements (such as the Buyer Agency Agreement) and is not a condition that allows a buyer to terminate a purchase contract. The buyer's right to terminate is tied to conditions affecting the buyer's ability or willingness to purchase the property — such as financing, appraisal, and inspection results — not to whether the broker receives a commission.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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