Marcus signs a purchase and sale agreement to buy a single-family home in Worcester for $420,000. The agreement contains a standard Massachusetts financing contingency. Marcus is unable to obtain a mortgage commitment by the contingency deadline despite making good-faith efforts with multiple lenders. He notifies the seller in writing before the deadline expires. Under Massachusetts law, what is the most likely outcome?

Correct Answer

B) Marcus is entitled to a full refund of his deposit because the financing contingency was not satisfied and he provided timely written notice.

Under Massachusetts law, a properly drafted financing contingency protects the buyer if they are unable to obtain a mortgage commitment despite good-faith efforts. When the buyer provides timely written notice that the financing contingency has not been met before the deadline, the contract is terminated and the buyer is entitled to a full refund of the earnest money deposit. The contingency acts as a condition precedent to the buyer's obligation to perform.