Most real estate purchase agreements today are, by their very nature, contingent on two important items that must be addressed before the transaction can be completed. These two items are often referred to as “contingencies” and can have a significant impact on the outcome of a real estate transaction.
The first contingency is the home inspection contingency. This contingency requires that the prospective buyer of a property has the opportunity to have the property inspected by a professional home inspector. This is an important contingency because it allows the buyer to identify any issues or problems with the property before closing on the sale.
As part of the home inspection contingency, the buyer will usually have a period of time, typically 10-14 days, to have the property inspected. If any issues are identified, the buyer will have the opportunity to negotiate with the seller to have these issues addressed or to back out of the transaction altogether.
The second contingency is the financing contingency. This contingency is designed to protect the buyer in case they cannot secure financing for the purchase of the property. In most cases, this contingency will require the buyer to secure a loan commitment from a lender within a specified period of time, typically 30-45 days.
If the buyer is unable to secure financing within the specified time frame, the transaction may be terminated, and the buyer`s deposit will usually be returned to them. This contingency provides buyers with an added level of protection, ensuring that they are not left without financing for a property they have already contracted to purchase.
It`s important to note that both of these contingencies can have a significant impact on the outcome of a real estate transaction. If the buyer is unable to secure financing or if significant issues are identified during the home inspection, the transaction could be terminated, and both parties could be left without a sale.
As a result, it is important for both buyers and sellers to understand the importance of these contingencies and to ensure that they are adequately addressed in the purchase agreement. By doing so, both parties can ensure that the transaction is completed smoothly, and that everyone involved is satisfied with the outcome.
In conclusion, most real estate purchase agreements are contingent on two important items: the home inspection contingency and the financing contingency. These contingencies provide buyers with an added level of protection and ensure that both parties are aware of any issues with the property or financing before the transaction is completed. As a professional, it`s important to emphasize the significance of these contingencies in real estate transactions to help educate readers on their importance.