What Are Contingencies in Real Estate? Learn about the Topic in This Article

Are you wondering what a real estate contingency? In this article by Advanced Title Company, you will be able to learn what a contingency is as well as about the most common real estate contract contingencies.

What is a real estate contingency clause? Contingencies are conditions or provisions that both the seller and the buyer can agree on that make the contract bull or void in case of certain events happening. This conditions are stated in the bargaining process, and they can be about almost everything or every situation. Despite this, there are certain provisions that are normally in every real estate contract. Learn more in this article by Advanced Title Company in Clifton.

Mortgage Contingency

This is one of the most common contingencies in real estate contracts. This contingency states the transaction will only be completed if the buyer’s mortgage is approved with the same terms as stated in the contract and previously approved by both parties. Usually, the buyer will be offered the stated deal, but, if this were not to be the case, the contract could become void.

Closing Date

In every house or property selling process, a closing date us specified. There might be different issues that may occur during the process, like the buyer not providing the mortgage funds or them not gearing home insurance as previously agreed upon. In this cases, the seller can back out. There is also the option of extending the closing date, but this can also allow the seller to make the contract void and accept a better offer they might already have on the property.

If you are thinking about investing in a new property, make sure to protect your investment with title insurance. Get in contact with Advanced Title Company in Clifton and get the assistance you need by calling (970) 255-7677.

Sale of Another Home Contingency

In some cases, the buyer will only be able to buy the new property after ensuring they get the funds from the sale of another property like their current home. In this case, a contingency is stated in the contract where the seller agrees to having this deal in order to complete the transaction. In the case of the buyer not getting the funds to buy the new property, the contract becomes void and the seller can go on on accepting another deal for the home or property.

Insurance Approval

It is very common for sellers yo require buyers to apply for homeowners insurance and to obtain it before closing. This also protects the buyer as it ensures their new property is insured and secure in case of any water and fire damage as well as other unexpected issues that may come along the way. In some regions, obtaining insurance for a new property may be more challenging than in others, which can bring problems to be able to obtain the new property properly. The insurance approval contingency gives buyers the opportunity to make the contract void or back out in case of not securing the insurance before closing.

When investing in a new property, making sure it is insured should be a priority. Get in contact with a professional at Advanced Title Company in Clifton and learn about title insurance and about all the services they offer. For more information, call (970) 255-7677.

Final Walk-Through

In some cases, a final walk-through contingency is also added to real estate contracts. This states that the transaction will only be made if the buyer is content with a final walk-through of the property as well as ensure the property has not suffered any damage since the terms of the contract being made. If problems or issues were to arise, there could be a negotiation to the issues being fixed, or the buyer can back out on getting the property overall.

Clear Title

This is a very important contingency clause. It protects both the seller and the buyer. A title company or a real estate attorney will do a title search on the property to ensure everything is in order. Where it comes to property titles, it needs to be ensured there isn’t a lien that needs to pay before selling the property or that there aren’t any legal issues with the property. If this were to be the case, the contract would become void. On the other hand, the transaction will be completed, and the buyer will be ensured to have a protected new property!

If you are in need of protecting your property with title insurance, get in contact with an expert at Advanced Title Company in Clifton. They will give you the assistance you need to ensure everything goes as planned along your process. For more information, call (970) 255-7677.