Real estate contracts often have contingencies. A contingency is a clause in a contract that gives either the buyer or seller a way to get out of the contract if certain conditions or timelines aren’t met. A contract could be contingent on anything a buyer and seller agree to, but there are a few very common contingencies. Typical contingencies are:
- sale of home
- home inspection
Generally, a contingency only last for a period of time and the contingency expires. After a contingency expires, either the contract expires or the contingency expires depending upon the terms of the sales agreement.
For example, Mary needs to needs to sell her present home before being able to get financing on a new condo she wants to buy. So Mary makes her offer contingent upon the sale of her existing home. If Mary is able to sell her home sold within that time period specified by the contingency, she can go forward with her purchase of the new condo. But if she fails to sell within the specified time period, the condo seller has the option of getting out of the deal.
Whenever possible, seller’s prefer offers that don’t have contingencies. This is because sellers usually believe that they can find another buyer capable making a purchase without contingencies. However, in today’s market, sellers are more willing to accept contingencies than they have been in years. So contingencies, like appraisal and home inspection, are quite common and meet with little resistance from sellers.
The exact terms of a contingency, like everything else in a real estate contract, are negotiable. As your agent I can help guide you to make sure your contract has the right contingencies.For more information or to set up an appointment call Nesbitt Realty at (703)765-0300.