Contingencies in a real estate contract are things that have to happen before you can close the transaction. Some of these contingencies have a time limit, and some just have to happen at any time before the closing. Since I am a Realtor in Greenville South Carolina, I will be talking about the contingencies in our Greater Greenville SC real estate contract. If you live in another area, there may or may not be some additional contingencies.
This is probably the most important contingency in a real estate transaction. If you are paying cash for your home, then this contingency does not apply to you. However, if you are getting a loan, then the lender must approve your loan and fund it in order for you to close on the house. If you are buying Greenville SC real estate, you will need to get a pre-approval letter from a lender when making an offer. If the seller happens to accept your offer without one, then you will have a specified amount of time to apply for financing.
Of course the home you are buying has to appraise for no less than the sales price. However, if it does appraise for less, then the seller will either have to lower the price, or you can choose to cover the difference, or walk away for the contract and get your earnest money back. The appraisal is usually ordered by the lender, or an appraiser of your choice if you are paying cash.
Unless your current home is already under contract, most sellers will not want to accept a contract that is contingent on the sale of your home. Most sellers will not want to loose the exposure on their home by taking it off the market while you try to sell yours. The seller that accepts this contingency will probably not be willing to negotiate much on the price, unless they are really motivated.
In a Greenville real estate contract, the buyer will have an inspection period that is agreed to by both parties. Lets say the inspection period is 10 days, within 10 days, you will have to do your home inspection, termite inspection, radon inspection, and any other inspections you want done. If both parties agreed to the buyer's right to terminate, then you will have the unilateral right to reject the condition of the home, terminate the contract and get your earnest money back. If you choose to proceed with the contract, then you can request repairs from the seller during your 10 day inspection period.
The contingencies mentioned above are the most common in a real estate transaction. However, there are other contingencies that could be added into the contract. For example, if the buyer has not seen the Seller Disclosure yet, then the contract can be made contingent on the buyer's approval of the Seller's Disclosure.
Please contact us at 864-438-5050 for more information about Greenville SC real estate and homes for sale or to work with one of our Greenville SC real estate expert Realtors.