Tom and Susan are selling their home in Newton, Massachusetts. Their purchase and sale agreement with the buyer includes a home inspection contingency. The buyer's inspector discovers a cracked foundation, and the buyer submits a written request for a $15,000 repair credit within the contingency period. The sellers refuse to provide any credit. What is the buyer's most appropriate course of action under Massachusetts practice?
Correct Answer
D) The buyer may cancel the contract and recover the deposit, since the sellers refused to address the defect identified during the contingency period
Under Massachusetts real estate practice, a home inspection contingency typically allows the buyer to cancel the contract and recover the deposit if the parties cannot reach agreement on repairs or credits for defects discovered during the inspection period. When the sellers refuse to address a material defect like a cracked foundation, the buyer can exercise the contingency to void the contract and recover the deposited funds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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