Offer Contract Contingencies to Consider
Sunday June, 2023 02:10 PM Filed in: Contract Law | Contingencies
Residential contingencies safeguard buyers in real estate deals. From financing to inspections and beyond, they offer protection, negotiation power, and clarity.
When crafting a real estate offer, it's crucial to include contingencies to protect your interests. Here's a comprehensive list of residential contingencies along with detailed descriptions of each:
These contingencies serve as vital safeguards in a real estate transaction, allowing buyers to assess and address potential issues while providing an exit strategy if needed. It's essential to work with a qualified real estate agent or attorney to tailor these contingencies to your specific needs and local regulations.
- Financing Contingency:
- Description: This contingency ensures that your purchase is dependent on securing adequate financing for the property. If you cannot secure a mortgage loan within the specified timeframe, you can cancel the contract without penalty.
- Appraisal Contingency:
- Description: This contingency allows you to cancel the contract if the property's appraised value is lower than the agreed-upon purchase price. It safeguards you from overpaying for the property.
- Home Inspection Contingency:
- Description: With this contingency, you have the right to conduct a thorough inspection of the property. If significant issues are discovered, you can request repairs or negotiate the purchase price or choose to walk away.
- Title Contingency:
- Description: A title contingency ensures that the property has a clear and marketable title. If any title defects or liens are found during the title search, you can require the seller to address them before closing.
- Home Sale Contingency:
- Description: If you need to sell your current home to finance the purchase, this contingency allows you to do so. If your home doesn't sell within a specified timeframe, you can cancel the contract.
- Homeowners Association (HOA) Contingency:
- Description: This contingency enables you to review and approve the HOA's rules, regulations, financial health, and any pending assessments. If the HOA doesn't meet your criteria, you can back out.
- Insurance Contingency:
- Description: This contingency gives you time to secure homeowner's insurance for the property. If you're unable to obtain suitable coverage, you can cancel the contract.
- Loan Approval Contingency:
- Description: This contingency is more specific than the financing contingency. It stipulates that you must receive final loan approval from your lender within a set timeframe.
- Satisfactory Seller Disclosures Contingency:
- Description: You can include this contingency to ensure that the seller provides accurate and complete disclosures about the property's condition, history, and any known issues.
- Property Sale Contingency:
- Description: If you're relying on selling another property to fund the purchase, this contingency allows you to cancel the contract if your property doesn't sell within the specified timeframe.
- Lead-Based Paint Contingency:
- Description: Required for homes built before 1978, this contingency ensures the buyer receives a lead paint disclosure and the opportunity to conduct lead paint inspections.
- Mortgage Contingency (with Rate Lock):
- Description: This contingency specifies that you're proceeding with the purchase only if you secure financing at or below a certain interest rate.
- Septic Inspection Contingency:
- Description: Common for properties with septic systems, this contingency allows you to inspect the system's condition and functionality.
- Radon Inspection Contingency:
- Description: For areas with known radon issues, this contingency permits you to test for radon gas and request mitigation if elevated levels are found.
- Pest Inspection Contingency:
- Description: This contingency authorizes a pest inspection to identify and address any termite or pest infestations.
- Well Water Contingency:
- Description: If the property has a well, this contingency lets you test the water quality and quantity to ensure it meets your standards.
- Flood Zone Contingency:
- Description: In flood-prone areas, this contingency allows you to cancel the contract if the property is determined to be in a designated flood zone.
- Survey Contingency:
- Description: This contingency gives you the right to request a property survey to confirm boundaries, easements, or encroachments.
- As-Is Contingency:
- Description: By including this contingency, you acknowledge that you're purchasing the property in its current condition, with no expectation of repairs or concessions from the seller.
- HOA Approval Contingency:
- Description: If the property is part of an HOA, this contingency allows you time to submit an application and obtain approval to join the association.
- Government Approval Contingency:
- Description: For properties that require government approval for certain uses or modifications, this contingency ensures the necessary approvals are obtained before proceeding with the purchase.
- Permit Contingency:
- Description: This contingency requires the seller to provide documentation of all permits for additions or renovations made to the property. If permits are missing or not up to code, you can negotiate or cancel the contract.
Real Estate Attorney
945 E Paces Ferry Rd
Atlanta, GA 30326
Tel. +1 (678) 448-4148