In Michigan, when a buyer's purchase offer includes an inspection contingency and the inspection reveals defects, which of the following actions is generally available to the buyer?
Correct Answer
B) The buyer may request repairs, a price reduction, or void the contract and recover earnest money
Under a standard Michigan inspection contingency, when defects are discovered, the buyer typically has several options: (1) request that the seller make repairs before closing, (2) negotiate a price reduction or seller credit to compensate for the defects, or (3) void the contract and recover the earnest money if the parties cannot reach agreement. The inspection contingency is designed to give buyers flexibility in responding to discovered conditions, not to lock them into a single course of action.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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