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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.


Jamie Lou

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