Contingencies in real estate contracts

• In real estate contracts the contingency is a common element. Contingencies are clauses in a contract that hold both the buyer and the seller to the legal verbiage contained within that contract. Contingencies can give either the buyer or seller a way to get out of the contract if certain conditions aren’t met, such as, if the home does not appraise for the contract price, or if the cost for repairs exceeds what the buyer or seller is willing to pay.

Almost all contingencies contain a specific time frame. These time frames dictate how long a buyer has to apply for a mortgage; how long the buyer has to obtain final loan approval, how long the buyer has to obtain all inspections; how long either the buyer or the seller has to respond to the home inspection stipulations, etc. Every contract is unique. The possibilities for contingencies are virtually endless. Always pay close attention to the time frames in each contingency. These time frames can make or break your transaction!

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