A contingency clause is a clause designed to protect a buyer when they are purchasing a new home. The clause sets up provisions that must be met. The buyer will not be penalized for walking away from the purchase if this end of the deal is not upheld.
For example, most buyers will use a contingency clause regarding their home inspection. Under this clause, the house has to pass the inspection or they don’t have to buy it. This way, they can make an offer on a home that they have toured themselves, but they are not bound to that offer forever if a professional inspector comes in and says that the home is unsafe.
Some sellers prefer not having these clauses
The biggest reason to consider removing a contingency clause is when a buyer wants to give themselves an edge. Many sellers would prefer not to have contingency clauses because they just want the sale to go through. They don’t want anything to cause it to hang up or be delayed, especially not things that they would consider to be small details.
So, in a competitive market, there are potential buyers who will decide that they’re going to take the risk to leave out the contingency clauses. If the home doesn’t pass inspection or if they don’t get funding from the mortgage lender – or if other contingencies would’ve triggered – then the buyer may find themselves in a difficult position. But they may also be able to edge out another offer that would’ve provided the same amount of money but that did include contingencies.
Navigating this complex legal landscape takes dedication and time. Everyone needs to know exactly what steps to take.