Simply put, a contingency means that the sale of a home may proceed provided certain conditions are met. Contingencies are common and I will go through some of the most frequently seen contingencies here. There are contingencies that concern a property and there are contingencies that can involve personal or financial circumstances of the buyer or seller.
Once an offer has been accepted, the buyer often has an inspection done. In this case, an “inspection contingency” pauses the sales process in order for the inspection to be conducted. If the inspection turns up things that the buyer would like addressed and all parties agree on a path forward, the contingency is lifted and the sale proceeds. If the home does not meet with the buyers’ approval or the sellers won’t agree to the buyers’ requests, the sale falls through.
“Statutory rescission” is another common contingency seen with homes in an homeowners’ association (HOA). Because HOA governing documents can have a profound impact on one’s life in an HOA, the law requires that a buyer have ten days to examine the HOA governing documents and financials to decide if they want to proceed with their purchase.
Home sales can become contingent if one of the parties needs to satisfy a condition not directly related to the property they’re buying or selling. For instance, a buyer may need to sell their current home in order to buy the next. The listing will generally state this so that everybody is aware that this will need to happen.
There are contingencies related to financing and many other things. Sale contingencies are common and they’re a useful way to signal to others that an offer is in play or spell out a seller’s intentions. If you want to know more, give me a call, shoot me an email or speak to one of our agents.
