Under the TREC contract, the seller agrees to provide a residential service contract (home warranty) with a maximum cost of $600. At closing, the home warranty company charges $650. Who pays the additional $50?
Correct Answer
C) The buyer pays the $50 difference because the contract specifies a maximum seller contribution
Under the TREC contract, the seller's obligation is limited to the maximum amount specified in the contract ($600). Any amount exceeding the stated maximum is the buyer's responsibility.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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