Every real estate transactions has multiple contingencies. What is a contingency? Here is definition as it pertains to real estate transactions.
A contingency clause defines a condition or action that must be met for a real estate contract to become binding. A contingency becomes part of a binding sales contract when both parties, the buyer and the seller, agree to the terms and sign the contract
Most Common Real Estate Contingencies
- Deposit of Earnest Money – Our real estate contract calls for the buyer to deposit their earnest money within 1 business day of acceptance. If not done the buyer is then breached the contract.
- Loan Application – Buyers are given a timeline to complete their initial loan application and authorize the ordering of the appraisal.
- Appraisal – Timeline for the buyer’s appraisal to be completed.
- Loan Approval – Timeline for the buyer to get final loan approval.
- Title Report – Timeline for the buyer to review and raise objections to the preliminary title report.
- Common Interest Community (CIC)/Homeowner’s Association Docs – In Nevada buyers have 5 days to review the CIC documents and cancel if an objection.
- Inspections – Our contract calls out a specific time period for the buyer to conduct desired inspections. Buyers must cancel within the specified timeline if there is something objectionable discovered in the inspection.
- Repairs – If repairs are negotiated, the seller completing the repairs in a given timeline is required.
- Re-Inspections – If the contract calls for a re-inspection of repairs there is a prescribed timeline for this.
- Final Walk Through – If the seller fails to vacate or leaves the property in poor condition as discovered at the final walk through this contingency could delay closing.
- Receipt & Review of Seller’s Real Property Disclosure – The Seller’s Real Property Disclosure (SRPD) is delivered upon acceptance of a contract and the buyer then has 4 business days to review. The buyer signs or can terminate.
- Sale of Another Property – If the buyer has a property to sell in order to purchase this contingency is used. (This is a complicated contingency and will be subject of another blog post.)
Real estate transactions can be complicated. The Shocket Team has 15 years of experience in navigating these contingencies and helping both buyers and sellers understand their transaction. Reno-SparksRealEstate.com