Just as sellers have the right to suggest contingencies in a sales agreement buyers do also. Among the numberless contingencies which buyers may suggest several are particularly popular.
Deposits: Most buyers require a clause which states that the deposit will be returned in whole if after a good faith effort it is not possible to obtain financing under the terms of the sales agreement.
Inspections: Buyers frequently seek inspections by outside professionals to assure the condition of the home. A termite clause is probably the most common. A seller with this contingency will be required to provide a certificate of inspection at settlement which shows the home is free of termites. Some clause talk about the "premises" being termite free. Does this mean there are no termites in the wood pile? Termite claused also may suggest that the seller must repair "current" termite damage.What is "current?"
A second type of inspection, and one which is becoming increasingly common, involves an examination by a structural engineer. The engineer will provide a report on the condition of the property showing items which may require immediate repairs.
Inspection clauses may provide that the contract is contingent upon the buyers approval of an inspector's report. This gives the buyer a way to block the sale if desired.
Past Home: Buyers will often want a contigency to sell one house before purchasing a second. Sellers should not agree to such a clause if there is no time frame, such as 72 hours, in the contigency.
Attorneys: Buyers may write that the contract is contingent on the approval of their attorneys. This is another way to block the sale if desired. Some sellers suggest that they will accept the agreement only if the attorney's approval is related to "legal maters only." This is an exceptionally broad phrase. As an alternative, tie attorney approval to a specific time period such as 48 hours from the moment of contract acceptance.
Contingencies are an extremely important aspect of real estate agreements. Sellers should seek professional advice from attorneys or brokers on the contingencies they will need for their specific sale and the language which should be used.