Under what condition may a buyer terminate the contract and receive a refund of earnest money regarding lender required repairs?

The buyer may terminate the contract and receive a refund of earnest money if the lender-required repairs exceed 5% of the sales price. This provision is designed to protect buyers from unexpectedly high repair costs that could significantly impact the value of their investment. When repairs are estimated to surpass this threshold, it indicates a substantial financial burden, and the buyer has the right to reconsider their commitment to the purchase.

Understanding this threshold is important for buyers, as it provides clarity on the extent of repair obligations that can be assigned without allowing the buyer a route to exit the contract. The emphasis is on ensuring that buyers are not locked into a deal that may become financially unfeasible due to extensive necessary repairs mandated by the lender.