Think of a contingency clause as insurance. Once you find a home and make an offer, you hope everything will go smoothly; but in case it doesn’t, you have a contingency clause in place that allows you to back out of the contract without losing money.
Most agreements already have a few key contingency clauses in place to protect against the bigger things—such as a lower than anticipated Carmel, IN home appraisal—but there are contingencies that go beyond the norm. If you’re about to make an offer, consider all of your options.
Some contingency clauses are common when making an offer, such as:
- Home inspection: This gives the Carmel, IN homebuyer the right to order a professional home inspection and back out of the sale if major unreported damage is found.
- Appraisal: The buyer won’t be obligated to buy the home if the appraisal value is lower than the asking price.
- Mortgage availability: This gives the buyer time to find financing for the home. If the buyer can’t find financing, either party can cancel the deal.
You don’t have to stick with the standard contingency clauses. Depending on your situation, it may make sense to add additional clauses to the agreement. Some examples of atypical clauses are:
- Selling your current home: If you’re trying to sell your home before you buy another one, you may want to put a selling contingency in place. If you’re unable to sell your current home within a certain time frame, this contingency allows you to cancel your offer.
- Moving furniture early: With this contingency, you and the seller agree to allow you to move personal property in (or move in entirely) earlier than the seller anticipated. You may have to agree to pay the seller rent if you move in before closing, but it will spare you from putting your belongings in storage and finding temporary lodging.
A basic offer won’t automatically contain any contingency clauses. While many Carmel, IN real estate agents include some standard clauses in every offer, you should work with your agent to make sure you’re including contingencies for everything specific to your circumstances. Once you’ve submitted the offer, keep in mind that the seller may submit a counteroffer with his or her own contingency clauses as well.
As a Carmel, IN real estate agents, we can help walk you through your offer and any contingencies to ensure you are covered with your Carmel, IN home purchase. Please contact a Carmel, IN real estate agent when you decide to start your home search.
Rodney & Amanda Heard
Heard Real Estate Team