What term describes a house purchase that is dependent on the buyer obtaining a loan from a lender?

The term that describes a house purchase dependent on the buyer obtaining a loan from a lender is indeed the loan contingency clause. This clause is an important element of real estate transactions because it provides the buyer with a safeguard. If the buyer is unable to secure financing, the loan contingency clause allows them to back out of the contract without facing penalties, thus protecting their earnest money deposit.

The loan contingency clause outlines the specific requirements the buyer must meet to qualify for the loan, including matters such as creditworthiness and acceptable appraisal value. This provision is crucial for buyers, as it ensures they are not locked into a purchase they cannot afford due to financing issues. Therefore, it establishes the necessary condition for the transaction to proceed, aligning both the buyer's and seller's interests in the sale.