Contingencies are a useful tool that can protect your best interests when purchasing real estate. However, because they can be complex, it’s worth talking to an attorney about which contingencies to include in the contract. Here’s what you need to know before speaking to a lawyer.

An Introduction to Real Estate Contingencies

What They Are

A contingency is an action or condition that is required to be met for a contract to be binding. They must be met when the buyer submits the offer, and the seller accepts it. If the contingencies aren’t held to, the buyer has the power to back out of the sale and can often do so without losing the deposit. However, if they are met, the document is legally binding. 

Common Contingencies to Include

There are three common types of contingencies that buyers may request: 

• Appraisal Contingency: this means that a third party will be hired by the lender to appraise the value. If it’s lower than the sales price, the buyer can back out to avoid overpaying for a property.
• Home Inspection Contingency: this allows the buyer to hire an inspector. If any major issues with the property are found, the buyer can back out or request that the seller has them fixed.  
• Financing or Mortgage Contingency: this gives the buyer more time to secure their loan. If they cannot get the financing they need, they can back out of the sale and keep their deposit.

If you’re purchasing a home, contact Stuart R. Norman Jr. This real estate attorney has worked in New London County, CT, for more than 40 years. Attorney Norman and his team can guide you through every aspect of the purchase, from securing financing to reviewing the contracts. Schedule a consultation by visiting them online. Call (860) 376-0069 to speak with a real estate lawyer.