What is a Purchase Contract Contingency?
As a buyer you reach a point where you have to make an offer on a home. The offer will be presented in the form of a purchase agreement. This contract is one of the most vital documents you will encounter during the home buying process.
A contingency is a future event or circumstance that is possible, but cannot be predicted with certainty. When these items are included in a purchase contract, it is essentially giving yourself a way to back out of the contract if a certain event or circumstance occurs. Another way to think about it, is that a real estate contingency is a condition that must be met in order for the deal to go through. It is a requirement of the sale.
The primary parts of a contract at minimum will include; a mutually agreed-upon sales price, earnest money deposit, terms of the sale, date of final walk through, date of closing, and property address description.
Some common real estate contingencies include; home inspection, financing, sale of current home, home appraisal, and clear title. These are not the only contingencies that can be included within a real estate purchase agreement, but they are some of the most common inclusions. There is no limit on how many purchase contingencies you can put into your sales contract.