A buyer pays a $100 option fee for a 5-day option period on a $500,000 property. During the option period, the buyer's inspector finds that the HVAC system needs replacement at a cost of $8,000. The buyer asks the seller to reduce the price by $8,000. The seller refuses. What are the buyer's options?
Correct Answer
C) The buyer may terminate within the remaining option period and forfeit only the $100 option fee
During the option period, the buyer can terminate for any reason, including the seller's refusal to negotiate repairs. The buyer forfeits only the $100 option fee and receives back the earnest money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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