Real estate contingencies are conditions that must be met before a real estate transaction can be completed. These contingencies are typically included in the purchase agreement and allow the buyer to cancel the contract without penalty if certain conditions are not met. Here are some common types of real estate contingencies:
- Financing Contingency: A financing contingency allows the buyer to cancel the contract if they are unable to obtain financing for the purchase of the property. This contingency will typically specify a deadline by which the buyer must secure financing.
- Inspection Contingency: An inspection contingency allows the buyer to cancel the contract if the property inspection reveals any significant defects or issues that the buyer is not willing to accept. This contingency will typically specify a deadline by which the inspection must be completed.
- Appraisal Contingency: An appraisal contingency allows the buyer to cancel the contract if the property is appraised at a value that is lower than the purchase price. This contingency will typically specify a deadline by which the appraisal must be completed.
- Home Sale Contingency: A home sale contingency allows the buyer to cancel the contract if they are unable to sell their current home before the closing date. This contingency will typically specify a deadline by which the buyer must sell their current home.
- Title Contingency: A title contingency allows the buyer to cancel the contract if there are any issues with the property's title, such as liens, easements, or boundary disputes. This contingency will typically require the seller to provide a clear title to the property.
It's important to note that real estate contingencies can vary depending on the state and jurisdiction where the transaction takes place. It's recommended that buyers and sellers consult with a licensed real estate agent or attorney to ensure that all necessary contingencies are included in the purchase agreement and that their interests are protected.