A Colorado buyer's loan was denied after the loan objection deadline in the CREC Contract to Buy and Sell Real Estate had passed, and the buyer had not exercised the financing contingency termination right. The buyer now wants to terminate and recover the earnest money. What is the most likely outcome?
Correct Answer
B) The buyer has waived the financing contingency and is likely in default, with the seller entitled to retain the earnest money
Under the CREC Contract to Buy and Sell Real Estate, if the buyer fails to exercise the financing contingency termination right by the loan objection deadline, the contingency is waived. A subsequent loan denial does not revive the waived contingency. The buyer is likely in default, and the seller may be entitled to retain the earnest money as liquidated damages.
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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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