|
What contingencies are usually put in an offer?
|
|
|
Contingencies are there to protect the buyer from unknown facts and adverse outcomes during the due diligence period following the signing of a contract to buy real estate. For Aspen and Snowmass real estate transactions the typical closing would be scheduled 40 to 60 days after the contract date. During that time period the buyer has time to determine if he wants to go ahead with the transaction. In a seller’s market some of these contingencies are often left out of a contract to present a cleaner and stronger offer. There are three major contingencies.
► Financing Contingency: If the buyer is unable to secure financing according to the stated parameters (interest rate, monthly maximum payment, loan amount) he can dissolve the contract before the loan commitment deadline.
► Appraisal Contingency: If the value of the home as per an independent appraisal turns out to be lower than the offered purchase price the buyer can break the contract before the appraisal deadline. If notice of termination of the contract has been given in time, the buyer will receive his earnest money back and can move on to an alternative transaction if he so choses.
► Home Inspection Contingency: The buyer can have a inspected by a professional home inspector. If he finds anything that is not to the buyer’s linking the buyer can ask the seller for resolution or can terminate the contract. Actually the buyer can terminate the contract for any reason before the inspection deadline. He did not like the color of the carpet, too sunny etc..
The additional provision section of the contract allows the buyer to put any legal provision into the contract that he can think of. For example the contract could be subject to the buyer selling his current residence. |
|
|
