In real estate a contingency is common and written into almost every contract. Contingencies are clauses in a contract that give either the buyer or seller a way to get out of the contract if certain conditions or timelines aren’t met. Every contract can be unique. The possibilities for contingencies are virtually endless, however, some of the more commonly used contingencies would include:
Financing. Contingencies that depend on the buyer being able to obtain financing are very common.
Home Inspections. Probably the most common type of contingency is the “contingent upon satisfactory completion of inspection”. There are any number of specific types of inspections for which a contingency might be included in a contract. Some of the more common would include inspection by a qualified home inspector for hidden defects, radon tests, sewer line inspections, pest inspections, water and sewage system inspections, inspections dealing with the presence of mold, etc.
Appraisal. It’s not unusual for a buyer to have a contingency that requires an appraised value at or above purchase price. Since lenders will nearly always want an appraisal performed too, sellers usually don’t have a problem with this.
Remember, just like everything else in real estate contracts, contingencies are negotiable. In drafting your offer to purchase a home or piece of property, we will ensure that you are comfortable with all contingencies included in your contract and help you determine if it is appropriate to add additional ones as well.