What You Should Know About Contract Contingencies When Buying A Home
Making an offer to purchase real estate can be a very stressful event for many home buyers. Often, a buyer is committing to spend a substantial amount of money on a property they have viewed for less than thirty minutes. Adding more stress to the situation is the fact that in a sought after market like Sarasota a buyer may lose the property to another purchaser if he or she decides to “think about” it overnight.Fortunately, a purchase contract can be drafted with contingencies. A contingency in a contract makes the performance thereof dependent on the happening of a specified event such as a home inspection or a mortgage approval. By including the appropriate contingencies in a purchase contract a buyer is able to tie up a property at a price and upon terms agreeable to the seller, without totally risking the loss of his or her earnest money deposit.Generally, there are three different real estate contract forms used in Sarasota County by Realtors and Attorneys. All three forms provide for the insertion of standard contingency clauses. Some of the more common contingencies include a financing contingency which conditions a purchase upon the buyer obtaining a loan commitment within a specified time period; a home inspection contingency which provides the buyer an opportunity to ascertain the condition of a home; and a document review contingency which provides a buyer an opportunity to familiarize him or herself with the rules and regulations of a community. Other contingency clauses provide the buyer an opportunity to sell an existing home or to explore remodeling possibilities before closing.
Having said that, a buyer should consider that an offer without contingencies is more attractive to a seller and can sometimes result in a lower purchase price. Care should be taken to include only the necessary contingencies.
Finally, remember that all offers can be made contingent upon the review of an attorney within a reasonable time period. An attorney should be able to review a contract within 24-48 hours of being retained and can draft provisions specific to your transaction.
– Lauren Kohl