When Florida residents plan to buy or sell residential real estate, they likely understand that the basics of the deal will include an agreement on the purchase price and, most likely, when the deal will be closed. However, from the initial negotiations about the deal to the date upon which pen hits paper at closing, any number of issues might pop up. Some of these “contingencies” can be anticipated and included in a real estate purchase agreement.
So, what is a contingency in a real estate purchase agreement? Well, one very common example is that the entire deal is contingent on the buyer selling his current home, the proceeds of which will be used by the buyer to fund the deal in question. Or, another common contingency is that the buyer must secure financing for the deal, if the deal is not going to be “all cash.”
The home inspection is another big question when it comes to residential real estate deals. Typically, the buyer reserves the right to have a home inspection completed by a professional and, depending on any potential issues with the home that are identified in the inspection, a whole new period of negotiation may occur in which the parties try to agree on what repairs, if any, need to be completed by the seller before the buyer will go through with the transaction.
Each real estate transaction is unique and, as a result, the contingencies in any given deal will be different based on the facts involved. Sometimes financing isn’t any issue; sometimes buyers waive the right to a home inspection. But, if either side has concerns about the deal, drafting a real estate purchase agreement with the right contingencies included is crucial.