Below, our friends from Hayhurst Law PLLC explain contingencies and what is important to know about them.
Protecting Your Right To Walk Away When The Deal Is Not Right
When you make an offer on a home, you are entering into a legal agreement with the seller. That agreement spells out the price, the timeline, and the terms. But as a buyer, you need to protect yourself in case things do not go as planned. That is where contingencies come in.
Contingencies are conditions written into the purchase contract that must be met before the sale is final. They give you a legal escape route so you can walk away without losing your earnest money if certain issues come up. First-time buyers should understand exactly how they work, because they can mean the difference between a smart purchase and a costly mistake.
Why Contingencies Matter
Without contingencies, walking away from a deal can cost you thousands. If you change your mind or run into a serious problem, the seller could keep your earnest money and even take legal action. Contingencies protect you from that by giving you specific reasons you can legally back out.
Common Contingencies To Include
- Inspection Contingency – Lets you renegotiate or walk away if the home inspection reveals serious problems such as structural damage, a bad roof, or unsafe wiring.
- Financing Contingency – Protects you if you cannot secure a mortgage even after making a good-faith effort.
- Appraisal Contingency – Allows you to back out if the home is appraised for less than the agreed price.
- Title Contingency – Ensures you are not forced to buy a home with ownership disputes, liens, or unpaid taxes.
How Contingencies Protect You
Think of contingencies as a safety net. If one of the agreed-upon conditions is not met, you can walk away without penalty. They also give you leverage to renegotiate. If the inspection reveals problems, you might ask the seller to make repairs or lower the price instead of canceling outright.
The Role Of A Real Estate Attorney
A postnuptial agreement lawyer who is also a licensed real estate attorney, makes sure your contingencies are worded clearly and are enforceable. They help you meet any deadlines so you do not lose protection. If a seller refuses to honor a contingency, your attorney can step in and defend your rights.
Keep It In Writing
A verbal promise is not enough. Contingencies must be part of your written purchase agreement. A good attorney will make sure everything is documented so there is no confusion later.
Buying your first home is exciting, but it is also a big legal commitment. Contingencies give you breathing room and protect both your money and your rights. Work with your attorney to make sure you have the right ones in place before you sign.