Under the TREC contract, if both the buyer and seller want to mutually terminate the contract, they should:
Correct Answer
C) Execute a mutual termination agreement releasing both parties and directing the disposition of earnest money
A mutual termination should be documented in writing, releasing both parties from their obligations and directing the escrow agent on how to disburse the earnest money. This protects both parties from future claims.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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