Contract Contingencies

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Contingencies are your built-in buyer protection plan, placing conditions on the sale that ensure you’re not taken advantage of.

The most common contingency is a physical inspection, which allows buyers to determine whether there’s an issue with the home that’s bigger than they’re willing to tackle.

Other Contingencies

Mortgage contingency gives the buyer the right to back out of the sales contract and receive their earnest money if they are unable to obtain financing within a specified period of time. 

Appraisal contingency allows the buyer to cancel a sales contract if the appraised value comes back at a lower value than the contracted price and makes it such that the bank cannot loan at the original loan amount.

Clear title or ownership contingency allows the buyer to exit the contract if the property is not delivered with a title that is fee and clear of any liens or encumbrances. Clear title is required to get a mortgage loan. 

Categories: Home BuyingEducationGeneral
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