Contingency Contract For Home Sale
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FAQ
A contingency is a potential occurrence of a negative event in the future, such as an economic recession, natural disaster, fraudulent activity, terrorist attack, or a pandemic.
For example, say there's a contingency where it states that if the home inspection reveals serious flaws and you don't want to put in the work for repairs. If this is the case (and you got the home inspection well in time), then you can back out from the real estate transaction and get your earnest money back.
A financing contingency clause states something like, ?Buyer's obligation to purchase the property is contingent upon Buyer obtaining financing to purchase the property on terms acceptable to Buyer in Buyer's sole opinion.? Some financing contingency clauses are not well drafted and will provide clauses that say simply ...
Contingencies can include details such as the time frame (for example, ?the buyer has 14 days to inspect the property?) and specific terms (such as, ?the buyer has 21 days to secure a 30-year conventional loan for 80% of the purchase price at an interest rate no higher than 4.5%?).