Oregon broker Kim represents buyer Chen in a transaction. The purchase and sale agreement includes an inspection contingency giving Chen 10 days to conduct inspections. On day 8, Chen's inspector discovers that the home's septic system is failing and will cost approximately $18,000 to replace. Chen wants to renegotiate the price. Under the inspection contingency in the Oregon purchase and sale agreement, what is Chen's MOST appropriate course of action?
Correct Answer
A) Submit a written repair request or price reduction to the seller within the contingency period
Under Oregon purchase and sale agreements, an inspection contingency gives the buyer the right to conduct inspections and, if unsatisfied, to either terminate the contract or negotiate repairs or a price reduction with the seller. The most appropriate course of action is for Chen to submit a written repair addendum or request a price reduction within the 10-day contingency period. This preserves the buyer's rights under the contingency while pursuing a negotiated resolution. If the parties cannot agree, Chen can then elect to terminate and recover the earnest money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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