a real estate contingency is a provision that something must be overcome or approved to consummate a transaction. the major ones are for property condition or inspection and loan or finance (to include appraisal). (on rare occasions, such as some tenant occupied properties, the buyer may have to make an offer first and then, after it’s accepted, view the home or apartment building. in that case it’s “write offer subject to inspection” – a contingency that you’ll accept it after you get into escrow! the two we see most common are these: some homes are part of a co-op (cooperative) and in a few areas around the country, i think mainly in new york city, a board must approve whomever wants to purchase the home or unit.
i have never run into it in the san jose, los gatos, or saratoga area but it is possible that you could see it somewhere in california. seller contingencies usually make it difficult to attract buyers since there is a giant unknown in terms of the ability to close escrow and it’s not in the buyer’s control to fix it. when sellers invoke that contingency (which must be listed in the mls), it will usually cut down on showings, offers, and ultimately the probable buyer’s value for the home – so normally this is not advisable. hi, i’m mary pope-handy, the originator of this blog and a silicon valley realtor with sereno in the los gatos office. we both contribute to the research and many articles on this blog. use this link to browse properties which are for sale, under contract (pending) or sold.
normally, when contingencies enter the picture on a real estate deal, they’re coming from the buyer’s side of the table. are there any contingencies that sellers can use to aid themselves during the course the transaction. while seller contingencies are less common, there are a few that you can use to your advantage, should you need them. for reference, the home sale contingency states that buyers have to sell their current home before they can afford to buy yours. if they can’t find a suitable buyer within that time period, they have the option to back out of your deal. sounds like a raw deal from the seller’s perspective, right? the kick-out clause effectively states that you’re also allowed to continue marketing your home to others for a specified period of time.
at that point, they have 72-hours to come up with the funds to buy your home, either by finding a buyer of their own or applying for another mortgage. for those buying and selling a home at the same time, a rent-back contingency may be of interest, especially if you end up selling your old home before you get the keys to the new one. as the name suggests, the rent-back contingency allows you to rent your old home from your buyer for a specified period of time. keep in mind, though, that this contingency is essentially asking the buyer for a favor. they don’t have to agree to rent the home back to you. this contingency is used in the event that the sellers find a buyer for their home before they’ve found anywhere to move. it allows the sellers to continue looking for a home for a specified period of time. as you can see, in this case, the buyer would have very little recourse if you decide to pull out of the deal so you’ll be hard-pressed to find a buyer that’s willing to accept it.
a settlement contingency, on the other hand, is used if the buyer has already marketed their property, has a contract in hand, and a closing date on the a home sale contingency gives the buyer a specified amount of time to sell and settle their existing home in order to finance the new one. this type of a real estate contingency is a provision that something must be overcome or approved to consummate a transaction. in other words, it’s a, seller contingency clause, seller contingency clause, sale contingent on seller finding replacement home, how often do contingent offers fall through, home sale contingency earnest money.
the home of choice contingency – sometimes also known as a suitable property contingency – is essentially the seller’s answer to the home sale the contingency is a clause that needs to be met by either the buyer or the seller or both to continue with the sale. if necessary, you can in real estate, a contingency refers to a clause in a purchase agreement specifying an action or requirement that must be met for the contract, what are examples of contingencies, appraisal contingency, inspection contingency back out, inspection contingency example, what is a 10 day contingency in real estate, contingency clause example, financing contingency, appraisal contingency clause, appraisal contingency example, mortgage contingency clause example.
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