A Pennsylvania buyer includes an appraisal contingency in the Agreement of Sale for a property priced at $400,000. The appraisal comes in at $375,000. Under the standard PAR appraisal contingency, what are the buyer's options?
Correct Answer
C) The buyer may terminate the agreement and receive a full refund of hand money, or negotiate a lower price
Under the PAR appraisal contingency, if the property appraises below the purchase price, the buyer has the option to terminate the agreement and receive a full refund of the hand money deposit, or negotiate with the seller for a price reduction or other resolution.
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More Pa Specific Contract Provisions Questions
Under the PAR Agreement of Sale, all of the following are obligations of the buyer under the mortgage contingency EXCEPT:
A licensed salesperson in Pennsylvania mishandles the hand money deposit by depositing it into their personal account instead of the broker's escrow account. The buyer later defaults, and the deposit is not fully available. What are the consequences for the salesperson?
A buyer in Chester County closes on a property and later finds that the seller had an outstanding municipal lien for $8,000 that was not disclosed or satisfied at closing. The title insurance company missed the lien during the title search. Who is likely liable?
A buyer in Schuylkill County enters into a PA Agreement of Sale for a property that was listed as having 3 acres. After closing, the buyer discovers the property is only 2.5 acres based on a new survey. The Agreement of Sale did not include a survey contingency. What remedy may the buyer pursue?
A buyer in Blair County closes on a property and later discovers the seller's real estate agent knew about a major plumbing defect but did not disclose it. The buyer sues both the seller and the agent. If the buyer obtains a judgment against the agent but the agent cannot pay, what is the maximum the buyer can recover from the PA Real Estate Recovery Fund per transaction?
- → A buyer in Montgomery County defaults on a PA Agreement of Sale. The seller wants to pursue both liquidated damages (retaining the hand money) AND actual damages through a lawsuit. Under PA law, can the seller do both?
- → A buyer in Erie County wants to know who decides if a breach of the Agreement of Sale has occurred. Under PA law, who makes this determination?
- → A buyer in Cambria County wants to sue a seller for breach of the PA Agreement of Sale. The buyer's attorney recommends filing in the Court of Common Pleas. What type of court is the Court of Common Pleas in Pennsylvania?
- → A buyer defaults on a PA Agreement of Sale with a purchase price of $380,000. The hand money deposit is $12,000 (retained by the seller as liquidated damages). The seller relists and sells the property 4 months later for $365,000, incurring $6,000 in additional carrying costs and $4,500 in remarketing expenses. If the seller had pursued actual damages instead of liquidated damages, what is the total potential actual damage claim?
- → In Pennsylvania, the Statute of Frauds requires that real estate contracts be in writing. Which of the following contracts is subject to this requirement?
- → Under the PAR Agreement of Sale, which of the following is NOT a standard remedy available to the seller when a buyer defaults on the contract?
- → A buyer in Lancaster County signs a PA Agreement of Sale. The agreement includes a provision allowing the buyer to assign the contract to another party. Under Pennsylvania law, which statement about contract assignment is correct?
- → Michael, a broker in Pennsylvania, holds a $15,000 hand money deposit in escrow. After the transaction falls apart, both the buyer and seller claim entitlement to the deposit. What should Michael do?
- → Under the PAR Agreement of Sale, the agreement includes a mediation clause for resolving disputes before litigation. If both parties agree to mediate, what is the nature of the mediation outcome?
- → A buyer in Pennsylvania defaults on a PA Agreement of Sale by refusing to proceed with the purchase. Under the agreement, the seller elects to retain the hand money as liquidated damages. What does 'liquidated damages' mean in this context?
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Maria is buying a home in Pennsylvania. Her agent explains that the Agreement of Sale includes a 'merger clause.' What does this clause mean?
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