Under the TREC Short Sale Addendum, the contract is contingent on the seller's lender approving the short sale. If the lender does not approve the short sale within the specified time period, what happens?
Correct Answer
A) Either party may terminate the contract if lender approval is not obtained within the specified period
Under the TREC Short Sale Addendum, if the seller's lender does not approve the short sale within the specified time period, either party may terminate the contract. The earnest money is returned to the buyer upon termination.
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Related Concepts
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.
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.
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