Legal FAQs for REALTORS® — Contracts and Forms
Lender-Required Repairs

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My buyer’s right to terminate the contract under Paragraph 23 has expired, but his inspector found serious foundation problems and possible mold because of a prior roof leak. Can the buyer can still terminate the contract after the option period because of these issues? (Updated Sept. 23, 2014)

A buyer can’t terminate a contract after the option period has ended just because the inspector found problems. However, under Paragraph 7E, if the buyer’s lender requires that these problems be repaired as a condition of making the loan and the buyer and seller can’t agree on who will pay for the repairs, then the contract will terminate. The buyer will retain the earnest money. In addition, Paragraph 7E provides that if the cost of lender-required repairs exceeds 5% of the sales price, then the buyer may terminate the contract.


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While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.

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