Purchase Agreement With Contingency
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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.
A contingency clause should clearly outline what the condition is, how the condition is to be fulfilled, and which party is responsible for fulfilling it. The clause should also provide a timeframe and what happens if the condition is not met.
In other words, the sale is contingent upon these conditions. Common contingencies in real estate include an appraisal contingency, inspection contingency, sale contingency or funding contingency.
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%?).
Making a contingent offer on a home Think of a contingency as an ?if-then? proposition. For example: If the appraised value of the property is lower than the purchase price, then I can ask for a lower price or get out of the contract.