Under the PAR Agreement of Sale, the buyer's mortgage contingency requires the buyer to apply for a mortgage within a specified number of days and provide proof of application to the seller. If the buyer fails to apply within the required timeframe, what is the most likely consequence?
Correct Answer
C) The buyer is deemed to have waived the mortgage contingency
Under the PAR Agreement of Sale, if the buyer fails to apply for a mortgage within the required timeframe, the buyer may be deemed to have waived the mortgage contingency. This means the buyer can no longer terminate the agreement based on inability to obtain financing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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 licensee in Pennsylvania is preparing a PA Agreement of Sale that includes an option for the buyer to purchase the property within 90 days. What makes an option contract valid in Pennsylvania?
A seller in Lehigh County discovers that the buyer has been secretly negotiating to purchase a different property while under contract. The buyer has not yet breached any deadlines. Can the seller declare the buyer in default?
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 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 Westmoreland County has an inspection contingency that expires in 5 days. The buyer has not yet scheduled an inspection. On day 4, the buyer asks the seller for a 10-day extension. The seller refuses. What happens?
- → A buyer in Lycoming County has an inspection contingency in the PA Agreement of Sale. The buyer's inspector recommends that a licensed electrician evaluate the electrical panel. The buyer schedules an electrician, but the seller refuses access for the follow-up inspection within the contingency period. What is the buyer's best course of action?
- → 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 Pennsylvania purchases a property contingent on obtaining FHA financing. The FHA appraisal identifies health and safety issues that must be corrected before the loan can close. The seller refuses to make the required repairs. What is the buyer's best course of action?
- → Under the PAR Agreement of Sale, the buyer has an inspection contingency with a 10-day inspection period. On day 8, the buyer submits a repair request. The seller does not respond by the end of day 10. What happens under the standard PAR provisions?
- → A buyer in Dauphin County wants to know what happens to the hand money if both the buyer and seller agree to cancel the PA Agreement of Sale by mutual consent. What is the typical outcome?
- → 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?
- → 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?
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A buyer in Pennsylvania includes a mortgage contingency in the PAR Agreement of Sale. What is the primary purpose of this contingency?
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A buyer in Pennsylvania has an inspection contingency in the PAR Agreement of Sale. The home inspector discovers knob-and-tube wiring throughout the house. The buyer submits a written request for the seller to replace all wiring before settlement. The seller refuses. What are the buyer's options?