Contingency clauses can protect you from risks if you’re buying a home, but only if you meet their deadlines. These clauses in a home purchase contract allow you to walk out of the deal if certain conditions are not met.
Common examples of contingency clauses include:
- Financing contingency: You must secure a mortgage by a certain date
- Inspection contingency: The home must pass a professional inspection to your satisfaction
- Appraisal contingency: The home must appraise at or above the purchase price
- Title contingency: The seller must provide a clear title to the property before closing, free of unexpected liens or legal claims
Each contingency has a set deadline. If you miss it, you may lose your chance to back out of the purchase without penalty. For instance, a home inspection may reveal issues with the home, but you’ve already missed the inspection contingency deadline. In such a case, you may have to accept the property as it is or lose your deposit if you walk away. It can also lead to legal issues for breach of contract.
Stay proactive
You’ll need to get things moving once your offer is accepted. This means scheduling inspections, working closely with your lender and keeping track of dates in the contract. A delay on your end could cost you big, even if the issue is not your fault.
Navigate the process with confidence
You don’t want to be locked into a deal you no longer want or risk your deposit because you missed a deadline buried in the fine print. That’s why having proper legal guidance is so important. It can help you understand which contingencies are essential, ensure your contract timelines are realistic, and keep you informed every step of the way.