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The Nitty Gritty of Contingency Clauses

The Nitty Gritty of Contingency Clauses

We recently covered the topic of inspection contingencies here on our blog at A Mother’s Touch Movers. We know that so many of you are in the market for a new home and with the current real estate market, you may be overly anxious to seal the deal. This seller’s market generally puts home sellers at an advantage because inventory is low and home buyers are ready to close, no matter what. Despite the climate, you need to be sure and protect yourself from a bad investment, even if it looks like a dream from the outside. An inspection contingency is just one way to do this. Let’s take a closer look at other potential contingencies that buyers can include in their offer for a home.

Before we dig deeper let’s review what a contingent offer really is. Simply put, the buyer has made an offer on a home and the seller has accepted, but in order for the sale to go through certain measures must be met. The general purpose of a contingency clause is to protect the buyer by allowing them to back out if the criteria set forth by the contingency is not met. Pretty standard stuff here. Once a seller accepts an offer from a buyer with any contingencies it is understood that they will not make a move on any other offers. They may investigate interest further but they cannot lawfully work with another potential buyer. With this being said, here are some common contingencies.

Appraisal Contingency

This states that the home value, once appraised, meets a specified amount. If this contingency is in place, a buyer has the right to back out of a purchase if the home does not appraise within a given amount of the agreed purchase price.

Sale of Home Contingency

Many times, buyers list their homes for sale while looking for a new home as well. This may be due to relocation or other life factors. This type of contingency allows the contract to be null and void if the party does not sell or close a sale within a given timeframe.

Financing Contingency

You cannot buy a home that you do not have financing for and this is the reasoning behind this clause. Once signed, a buyer has a specified amount of time to acquire financing for the purchase of the home. If they do not do so within that window of time, the seller can back out and work with another buyer.

Buying a home can be tricky, but if you work with a licensed professional Realtor who is reputable and knows the market, you can protect yourself. With all the stress of buying a home, why not make the move the easy part? A Mother’s Touch Movers has everything you need for your Melbourne, FL move. From packing supplies to complete moving, we have you covered. Contact our office today!

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