Keep an eye on contingencies when buying or selling
Most, if not all, real estate contracts have contingencies that will allow the buyer, or sometimes the seller, to terminate the agreement if investigation reveals that the property is not worth the price or if the property has defects that the buyer wants the seller to repair.
These contingencies are conditions that must be met to close the real estate deal. Contingencies can be approved, rejected or waived. In many cases, the price can be renegotiated and the repairs can be agreed upon, but if sellers and buyers cannot reach agreement, contingencies will result in a voidable contract.
The most common types of contingencies include:
Inspection contingencies are sometimes more difficult to negotiate, as they can be both objective and subjective. For example, if the air-conditioning system is 10 years old but still working fine, the buyer might want the system to be inspected by a licensed HVAC specialist. Based upon that inspection, the buyer might request that repairs be made or that a new system be installed.
Other types of contingencies are:
If a buyer has too many contingencies, the seller might demand an escape clause, allowing the seller to continue marketing the property, and accept another offer if the contingencies have not been resolved or removed.
Larry Stoller is a broker-owner and Realtor with Real Estate Five of the Lowcountry. Larry@RealEstateFive.com or www.RealEstateFive.com