Featured News 2013 Contingency Plans on Your House Purchase Contract

Contingency Plans on Your House Purchase Contract

A contingency plan is considered to be the many conditions that are often listed on a purchasing contract before the sale will actually be complete. Within these conditions will include money matters, insurance, inspections, improvements, and the like. These terms are very important in a contract because in the event of unforeseen circumstances, it can protect a buyer from losing everything and having to purchase the home if a disaster occurs that causes a financial hold on their ability to purchase. While a contingency can make a little wiggle room just in case of a financial disaster, it is important to realize that once a home is purchased, there is no return policy. Once the house is yours, you're basically stuck. So, spend the time before hand in order to make sure that you are ready for that type of commitment.

How then, does a contingency agreement work? Before answering this question, it is important to also realize that as this process can be complicating, having the legal aid of a professional real estate attorney is highly encouraged. Dealing with legal contracts can be difficult for someone without training, and an attorney can not only do this for you but also protect you from being wronged in your contract terms. When you and the seller sit down to discuss your terms, it is very likely that both of you will place contingencies on the purchase. In most cases you two will give written offers and then counter offers until you reach an agreement and draft an official contract.

This time period may take a few weeks for the two parties to determined their final closing agreements and see that they are met. The majority of states will call this time phrase "escrow." During this process you will each be seeking to fulfill you parts of the contract by discuss loans with your bank as well as have your inspectors visit the home. Due to legality of the contingency contract, in the event that you or the other party does not meet the standards that were clearly placed in the terms, you can either renegotiate or drop the escrow and call off the purchase of the home.

Contingencies are a common occurrence when dealing with real estate and selling or buying a home, and there are some contingencies that would be considered foolish not to do. For example, having the buyer inspection contingency is a necessity. This way, as the buyer, the purchasing of the home will be based off of your being satisfied with the reports given by the inspector you hired. Another common contingency is financing which includes the sale being left to whether or not you are able to secure the loan for the purchase from your bank. This way, if you are not approved for the stated amount of money, you are not responsible to still purchase the home and the terms of the escrow can end.

In some cases, you may want to consider a buyers insurance contingency. This means that if the home you are purchasing has a history of mold problems, damages from hurricanes or earthquakes, etc. you can be protected. You will have to receive their commitment to this agreement in writing as well as approval from the insurance company. There are numerous other contingencies that can be discussed at the time of your meeting. Contact an experienced real estate lawyer in your area in order to have a professional on your side to walk you through the detailed process of purchasing or selling a home.

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