A home purchase contract typically includes contingencies to protect the parties against uncertainties and to allow the buyer sufficient time to complete the required checking and other tasks prior to closing. Most of these contingencies will probably be included in any contracts your receive.
Every home purchase contract should be expressly contingent upon review and approval by an attorney. Many states provide for an automatic review period regardless of the specifics of the contract.
The contract will probably be contingent upon the purchaser obtaining a mortgage commitment within a set period of time. The contract generally stipulates that the loan should be at “market” rates and terms – so the buyer can’t be compelled to accept an unfair loan if that is all that is available.
The contract will probably allow the buyer a reasonable period of time to arrange for required inspections. The exact inspections necessary vary with area, but typically include general home inspection, termite/pest inspection, and a radon test.
This is partially covered with a financing contingency, since the buyer will not obtain a mortgage if the property fails to appraise. Nevertheless, it is sometimes included separately – for example, when a buyer does not need mortgage but wants an appraisal anyway.
Repairs and cleanup
If the purchaser’s willingness to buy is based upon certain action by the seller – making a repair or removing excessive garbage or debris, for example – the contract will probably contain an contingency to that effect.
Sale of buyer’s home
Some contracts are contingent upon the sale of the buyer’s home to another party. Be very careful with this type of contingency.
Some transactions require special conditions. For example, if the home needs a lot of work the buyer may want a contingency period to get pricing from contractors.