The Smiths propose to buy the Browns' house for $125,000. If the Browns accept with a provision for a closing date of June 16 instead of June 15, what can the Smiths do?

The correct choice indicates that the Smiths can back out of buying the house with no penalty. This is due to the fact that a contract in real estate must be mutually agreed upon in its entirety, including all terms and conditions such as the closing date.

When the Browns accepted the offer from the Smiths but proposed a different closing date than originally stated, they effectively changed the terms of the agreement. This constitutes a counteroffer rather than an acceptance of the original offer. As a result, the Smiths are not bound to this newly proposed closing date since they never agreed to it. In real estate transactions, all parties must agree to the terms for a valid contract to exist. Because the Smiths did not agree to the new closing date of June 16, they are within their rights to withdraw from the transaction without any penalties.

In contrast, other choices imply that the Smiths have obligations to close under conditions they did not accept, which is not the case here as the acceptance included a change to the terms that the Smiths did not concur with. Therefore, they are free to choose whether or not to proceed with the purchase of the home based on the original agreement.