what are contingencies in real estate

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A contingency in real estate refers to aclause in a real estate purchase agreement that specifies an action or requirement that must be satisfied before the contract may become legally enforceable. Before a contract to be considered binding,both the buyer and the seller must agree on the terms of each contingency and sign the contract.

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  • What are the most common real estate contingencies?

  • In such cases, a house sale contingency is a real estate contingency clause that can help protect the buyer. If the buyers cannot sell their current home or at least the asking price within a specific amount of time, they can back out of the deal without being penalized. This may be one of the most common real estate contingencies. 7.

  • What is financing contingency in real estate?

  • Financing Contingency: Also referred to as a mortgage contingency, the buyer can gain more time to obtain financing in order to purchase the property. Home Inspection Contingency: This contingency provides the buyer with an opportunity to have the property inspected and negotiate the purchase price or repairs based on any findings.

  • What is a contingent offer in real estate?

  • Not all contingent offers are marked as a contingency in the real estate listing. For example, purchases made with a mortgage generally have a financing contingency. Obviously, the buyer cannot purchase the property without a mortgage.

  • What are the conditions of a contingency contract?

  • In essence, contingency contracts depend on certain conditions. Base Contingencies on Specific Events: In order for a contingency contract to be successful, contingencies must be specific and measurable. For example, a real estate contingency cannot simply say the property needs to be improved.

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