When you look to buy a place, you likely spend a lot of time looking for the right one – one that you like and can afford. You might be so thrilled to finally find somewhere that you rush to move on before someone else can take it from within your grasp.
This would be a big mistake. Property is not always what it seems, and failing to uncover issues could leave you in serious financial problems for years to come. This is where contingency clauses can help. They allow you to tell the buyer you want to purchase the place, preventing them from offering it to someone else while still giving you time to back out if you discover issues.
Which issues are covered depends on which contingency clauses you insert into the contract. Here are some to consider:
1. Funding contingency
You hope your current property is about to be sold to provide you with the money to buy the new one you like. But what if the buyer pulls out, perhaps because their buyer withdraws? Maybe you found a mortgage lender who agreed in principle to lend you the money, but what if they change their mind after doing final checks?
2. Inspection contingency
You should always get a thorough professional survey on a property. The surveyor might turn up problems the owner did not know about or hid from you. Either way, having the option to back out or negotiate on the price can be crucial.
3. Title contingency
Inheritance disputes, boundary disputes or poor recording in the past can lead to confusion about the ownership of a piece of real estate. Sometimes this can be quickly cleared up, but it’s essential to give yourself an option to withdraw where that is not the case.
Getting legal help to correctly word these clauses will be crucial to your security and peace of mind when looking to purchase real estate.