Real Estate Purchase Contract Contingencies
Contingencies are often included in a purchase contract for real estate. These clauses serve as a written provision that would void the contract if a specified event did or did not occur. Here, we discuss some of the contingencies that may be presented with a purchase agreement.
This clause states that if the property doesn’t appraise for at least the purchase price than the buyer may either back out or attempt to renegotiate the terms.
Home Sale Contingency
In some cases, a buyer will stipulate that if they are unable to sell their current property within the specified amount of time than they may cancel the contract with no penalty.
Conversely, a seller may request this clause as protection if the buyer is unable to sell their home. This grants the seller the opportunity to continue to market the home and sell it to another party if the buyer party is unable to remove the home sale contingency before close of escrow.
When a property is in escrow, a title search may uncover unknown issues such as a lien or a dispute over who is the property’s rightful owner. A title contingency will protect the buyer if such critical issues are not resolved by the seller before close of escrow.
Home Inspection Contingency
During the specified “inspection period” where the buyer performs their due diligence on the property, a clause in place to allow the buyer to cancel the contract based on the findings of the report protects the potential new owners from issues that may have been unknown when their offer is made.
This is common for buyers that will be securing a loan for the purchase. This stipulation will state that the offer is contingent upon the buyer’s ability to obtain financing. If the financing falls through during the escrow process, the buyer will not be held responsible for completing the purchase of the home.
Whether we’re representing you in the sale or the purchase of real estate, we will advise you on dealing with these contract conditions if they arise. Contact us today at Lucky@RussLyon.com or 602.320.8415