A contingency gives the buyer/seller the right to back out of a sale due to specific circumstances without any penalty. Found within contracts, there may be a list of several conditions that need to be met in order to close the sale. It is important once you figure out what contingencies you want to be sure to write them clearly into your offer.
There are several common contingencies:
-A buyer's inspection contingency is listed in the contract when the closing of the sale depends on the result of various inspections performed.
-A financing contingency appears when the sale is dependent on the buyer’s ability to receive an appropriate loan or other form of financing.
-An insurance contingency is used so the contract will be dependent on the buyer’s ability to buy and receive an insurance commitment for their future home.
-A title contingency is one of the most important contingencies that can be included. This allows the buyer to leave the contract if the seller of the property cannot produce a valid legal title.
Another common contingency is found when the buyer of a property makes the sale dependent upon the sale of their previous property.
Contingencies are designed to provide you with the best possible agreement that fits you the best. So, do NOT be afraid to ask about possible contingencies!
For more information, here is a great article to reference.
Are you in the process of searching for a new home?
Start your free and easy search of over 800+ properties on the market in Bryan/College Station.