What are some common contingencies in a real estate contract?
Contingencies are clauses in a real estate contract that outline certain conditions that must be met in order for the sale to go through. Some common contingencies in a real estate contract include:
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- Financing contingency: This contingency allows the buyer to back out of the sale if they are unable to obtain financing for the purchase of the property.
- Appraisal contingency: This contingency allows the buyer to back out of the sale if the property does not appraise for the sale price or higher.
- Inspection contingency: This contingency allows the buyer to back out of the sale if the property inspection reveals significant defects or issues with the property.
- Title contingency: This contingency allows the buyer to back out of the sale if there are issues with the property’s title, such as liens or other claims.
- Home sale contingency: This contingency allows the buyer to back out of the sale if they are unable to sell their current home within a specified timeframe.
- Homeowners Association (HOA) contingency: This contingency allows the buyer to back out of the sale if they are not satisfied with the terms or rules of the homeowners association.
These contingencies provide protection for buyers, allowing them to back out of the sale if certain conditions are not met. However, they can also create delays and complications in the sale process, so it’s important to carefully consider the inclusion and terms of any contingencies in a real estate contract.
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