CONTRACT FOR PURCHASE
CONTINGENCIES
CONTINGENCIES
COMMON CONTINGENCIES
Attorney Approval. Generally the first deadline to be met is the Attorney Approval
contingency clause. The contract will state within how many days the Attorney for
the Buyer must "approve" the contract or waive approval by an Attorney.
TIP: Always have an attorney represent you during the purchase of real estate.
Select the attorney who will be representing you during your purchase prior to
signing the contract. Since the attorney approval deadline is only days after the
contract is finalized, the Buyer does not have much time to select an attorney
once the contract is signed. Once the Buyer decides to purchase real estate, the
Buyer should find an attorney. The Buyer may not always feel comfortable and
confident with the first attorney he/she meets. If the first appointment with an
attorney is after the contract is finalized, the Buyer will not have much, if any time,
to seek alternative attorneys.
Inspection Approval. This clause allows the Buyer to have an inspection on the
property. If the inspection finds any problems with the property, the Buyer can
renegotiate the purchase price or request repair/replacement. The Buyer may
also obtain quotes for repair costs from professionals such as an electrician or
a plumber.
TIP #1: ALWAYS have an inspection of any property prior to purchase. Many
homes have problems unknown even to the owners such as foundation
problems, termite damage, leaks, etc. Using an inspector saved Attorney Angela
Lund-Logan from purchasing a home made entirely with "bad" wood.
TIP #2: Select the inspector prior to signing the contract. Many contracts only
allows a week or two for approval by the inspector. Unless you have a family
friend who is an inspector or received a recommendation from a trust individual,
Attorney Angela Lund-Logan suggests using Top Two Bottom Home
Inspections for your inspector as she has used them herself.
Financing Approval. The financing clause protects the Buyer from having to
purchase the property if the Buyer cannot secure financing (mortgage) by a
specific deadline usually three weeks. The contract will state the mortgage
terms that the Buyer must obtain as well. The Buyer must have a commitment
letter from the mortgage company stating that the Buyer has obtained the
requisite mortgage.
TIP #1: Obtain pre-approval prior to signing the contract for purchase. Having
pre-approval lets the Buyer know the price range of properties to view. This
keeps the Buyer from wasting time and money if the Buyer cannot obtain the
requisite financing.
TIP #2: Pre-approval lets the Seller know that financing is assured. Sellers have
accepted a lesser purchase price when submitted with a pre-approval letter.
Sellers have also chosen the contract with pre-approval when receiving multiple
contracts.
Contract for Sale of Buyer's Property. The Buyer can require that this Contract
is contingent upon the Buyer entering into a contract for the sale of the Buyer's
property. This clause will specify a
Repair or Replacement. The Buyer can require that the Seller either repair or
replace items on the property such as the furnace, air conditioner, water heater,
water softener, etc.
TIP: This contingency can be added immediately or once the inspection has
been completed. If some major problem is found during the inspection, the
Seller can be given the chance to fix the problem so the property will sell or the
price can be reduced to allow the Buyer to make the repair/replacement.
Attorney Approval. Generally the first deadline to be met is the Attorney Approval
contingency clause. The contract will state within how many days the Attorney for
the Buyer must "approve" the contract or waive approval by an Attorney.
TIP: Always have an attorney represent you during the purchase of real estate.
Select the attorney who will be representing you during your purchase prior to
signing the contract. Since the attorney approval deadline is only days after the
contract is finalized, the Buyer does not have much time to select an attorney
once the contract is signed. Once the Buyer decides to purchase real estate, the
Buyer should find an attorney. The Buyer may not always feel comfortable and
confident with the first attorney he/she meets. If the first appointment with an
attorney is after the contract is finalized, the Buyer will not have much, if any time,
to seek alternative attorneys.
Inspection Approval. This clause allows the Buyer to have an inspection on the
property. If the inspection finds any problems with the property, the Buyer can
renegotiate the purchase price or request repair/replacement. The Buyer may
also obtain quotes for repair costs from professionals such as an electrician or
a plumber.
TIP #1: ALWAYS have an inspection of any property prior to purchase. Many
homes have problems unknown even to the owners such as foundation
problems, termite damage, leaks, etc. Using an inspector saved Attorney Angela
Lund-Logan from purchasing a home made entirely with "bad" wood.
TIP #2: Select the inspector prior to signing the contract. Many contracts only
allows a week or two for approval by the inspector. Unless you have a family
friend who is an inspector or received a recommendation from a trust individual,
Attorney Angela Lund-Logan suggests using Top Two Bottom Home
Inspections for your inspector as she has used them herself.
Financing Approval. The financing clause protects the Buyer from having to
purchase the property if the Buyer cannot secure financing (mortgage) by a
specific deadline usually three weeks. The contract will state the mortgage
terms that the Buyer must obtain as well. The Buyer must have a commitment
letter from the mortgage company stating that the Buyer has obtained the
requisite mortgage.
TIP #1: Obtain pre-approval prior to signing the contract for purchase. Having
pre-approval lets the Buyer know the price range of properties to view. This
keeps the Buyer from wasting time and money if the Buyer cannot obtain the
requisite financing.
TIP #2: Pre-approval lets the Seller know that financing is assured. Sellers have
accepted a lesser purchase price when submitted with a pre-approval letter.
Sellers have also chosen the contract with pre-approval when receiving multiple
contracts.
Contract for Sale of Buyer's Property. The Buyer can require that this Contract
is contingent upon the Buyer entering into a contract for the sale of the Buyer's
property. This clause will specify a
Repair or Replacement. The Buyer can require that the Seller either repair or
replace items on the property such as the furnace, air conditioner, water heater,
water softener, etc.
TIP: This contingency can be added immediately or once the inspection has
been completed. If some major problem is found during the inspection, the
Seller can be given the chance to fix the problem so the property will sell or the
price can be reduced to allow the Buyer to make the repair/replacement.
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