Contingencies

hi kblue this is not a list but thought i would let u know about a lesson i just learned. after signing the purchase agreement on a sfr i put in contingencies that the water tests pass,septic system, etc and more but i wanted to find a buyer before the closing and show the house to my buyers list. well i had some buyers come look at the house and the owners showed up and said they wanted me to wait until the closing was finished .soooooo now i will put in an addendum or contingencie to let me show the house or have estimates done for repairs between the signing of agreement and closing !!

Yes..lol I can see that happening. These are the situations that I or I'm sure that no one else starting out wants to run into. The little details are the things that can put you in a large bind.

Thank you greatly for sharing!!!...any one else?

"SEE YOU AT THE TOP!!!"

I try to put as many things as I can think of into the contingencies. I mean anything that can potentially hurt me: anything from 45 days to close to being able to market the property before the closing.

Yuri

That's great!

Where in the contracts would you insert the "being able to market the property before closing? Would you use an addendum ?

Thanks in advance..

"SEE YOU AT THE TOP!!!"

I want to know exactly if this works the way I hope it does. If I put a clause of "this contract is subject to walk through inspection", what exatcly does that mean? I want it to mean that I can say to the seller, "Mr. Seller, your home has more repairs that I anticipated, therefore, I will no longer be obligated to go through with our agreement". I only intend to use that if I can't find a buyer so I can get out without penalty. Is this acceptable? Do you have to to have a list of "surprises" on repairs in order for this to work? Does "subject to inspection" refer to my contractor's inspection or an inspector? Can anyone clarify this ? Thanks!

When you do a subject to a walk thru inspetion. This is done usually right before you close on a property. To make sure it is in the conditon both parties agreed on. A subject to a home inspection is what is needed to be able to use as leverage to say the home requires more improvement than expected. Or use it to negotiate the offer price with or back out of the contract. An home inspection will always be beneficial to do when purchasing with the intent on keeping it or leasing it. Hiring a proffsional can save you alot of headaches in the future. Much success...........Lubertha

hi kblue yes i would put the market the property clause in an addendum or as part of your purchase agreement.this is important as to let the seller know what your intention is .have a great day kblue and good luck on all your deals if i can help in any way mail me as i know you and all dgers here are eager to help anyone at any time!!isnt it great!!!!

I believe your chances of getting these contingencies approved is better if you put them in the offer. An addendum is written after the contract is approved. Loosing the contract(buyer)is not a risk if the seller refuses to approve an addendum.

Al

Like Lubertha said, it is mainly a leverage and gives you a way to get out of the contract without losing any money.

I would put the marketing clause in the contract. This way everything is on the table.

Yuri

P.S. I always put it in the contract

Thank you all for your responses.

Al, I actually didn't realize the addendum is added after the contract is accepted.I can see how that could blow a deal after the negotiations.

Including everything into the contract can make everything transparent from the start, avoiding delays.

So far we have clauses of:

45 day closings
permission to market the property
contingent on inspection results

Excellent!! these are all great contingencies to add. Just finding way's to CYA eliminates all the fears of getting stuck in a contract without a buyer.

Anything more to add that anyone has used that got them out of hot water?? Earnest clauses, etc.??

Thank you all again..

"SEE YOU AT THE TOP!!!"

I know a lot of people use a finance clause! Something like this contract is contingent on buyer finding suitable financing... or something like that!

Subject to buyer's financing. This is subject to buyer's financing.
Lubertha

I put a pest inspection contingency. A friend saw a few ants and didn't think anything of it. She wanted to redo one wall in the kitchen. When the contractor took down the drywall all of the wall supports were termite infested. It took thousands of dollars to repair. She did not have a pest inspection clause.

Inspection and financing clauses are built into Realtors purchase contract forms. If you are writing your own, be sure to include them. Termite damage and infestation, structural damage, foundation damage, survey issues, poor roofing, wood rot, mold, plumbing issues, electrical issues, unpermitted additions, highway or airport noise, crime rates, and almost any negitive issue related to a property is covered by the inspection clause.

Al

I can't really use this because my Realtor has been telling other agents that I have cash , which I sort of do. I have Coastal Funding and most of my buyers are cash buyers. I could always tell him to not say this but it helps with negotiations. One clause I had in mind was "subject to buyer's partner aproval". Has anyone used this? It sounds like a great way to exit just in case.

yes the partner approval is excellent to use because your partner can be anyone which is your out .

I just signed my first contract and my agent convinced me that only 1 contingincie was necessary which was "offer contingent upon buyers contractor's inspection" and that it worked for his client to exit a contract. I probably should ve convinced him to put another emergency door but what's done is done.

Just do an addendum to the contract. It's not a legal binding contract until the attorney review is over. Hope this helps.........Continued success.
Lubertha

You can always submit the addendums.
In PA, you do not need a lawyer. Just tell your agent that you want to add few things and have him/her send the addendum over so they can sign it

Yuri

In this case I would use an attorney because for one you trusted the realtor's opinion. Her advice wasn't to your advantage. You have to make sure you are protected. I wouldn't give anyone a second chance to take advantage of my transaction because in the end it could cost you. Like Deans says, you learn from your mistakes, you don't repeat it. Trust is an issue with these kind of offer's. So if you have a realtor that is looking out for someone else's interest. Who's looking out for yours? You must! An attorney is a small fee to pay for assurance. Continued success..........Lubertha