Real estate contracts are an important part of the sale of a home. A home sale contract is created when you decide to purchase a particular home and the seller has accepted your offer.
Within this contract are a number of contingencies. The contingencies must be met before the home’s purchase can be completed.
What is a contingency?
A contingency is an act or condition that has to be met before a contract will become binding. In real estate, there are several contingencies that may exist in a contract that protect buyers and sellers.
One common contingency is the ability to obtain financing or a loan for the home. This contingency is normally in place from the time when you sign the home sale contract until closing. If you cannot get financing for the home during that time, then you’ll be unable to complete the purchase and the sale of the home will fall through.
Another good contingency to look for is the home inspection contingency. With this, the buyer has a right to a certain number of home inspections (usually at least one) within a set time frame. The contingency normally allows the buyer to exit the contract or to ask for repairs if the condition of the house is not satisfactory after the inspection.
On top of these, there are many other possible contingencies that contracts may have. If you work with a real estate agent and attorney, you’ll be better able to understand those contingencies and what needs to happen for you to complete the sale or purchase of a home.