What does the contingency clause in TREC Form 40-9 allow the buyer to do if the loan does not work out?

The contingency clause in TREC Form 40-9 is designed to protect the buyer’s interests, particularly in the scenario where the buyer is unable to secure financing for the purchase of the property. If the loan does not work out, this clause allows the buyer to terminate the contract without penalty and receive a refund of their earnest money.

This provision is crucial because it mitigates the financial risk for the buyer. Instead of being locked into a contract when they are unable to obtain the necessary financing, the buyer has a clear and defined exit strategy that enables them to withdraw from the transaction if financing falls through. It ensures that the buyer is not left in a precarious situation where they might have to forfeit their earnest money or proceed with a purchase they cannot afford, thus providing a level of security during the transaction process.

The other options, while they may involve actions the buyer could consider in different contexts, do not align with the specific intent of the contingency clause in TREC Form 40-9.