offer says "this offer is contingent upon (or subject to) a certain
event," you're saying that you will only go through with the purchase if
that event occurs. Almost every sale contract will have at least one “Subject
the common contingencies contained in a purchase offer:
obtaining specific financing from a lending institution: If the loan can't be
found, the buyer won't be bound by the contract. The sale is therefore subject
to the buyer getting a bond.
clause is quite common as almost every buyer will have to get a bond in order
to purchase. A good way to make this work for both buyer and seller, is for the
buyer to have a Bond Originator get them pre-qualified prior to making offers.
offer can include a contingency clause that allows the buyer to hire a home
inspector or professional expert to inspect the property. If there is a
significant defect in the property, the buyer can cancel the contract without being
period for inspection contingencies is negotiable but a common period the
buyers have is about a week in which to perform the inspection and allow cancellation
the contract if the structural inspection reveals a serious and consequential
positive side to such contingencies is that the inspection usually addresses -
and overcomes any misgivings the buyer might have, and confirms their decision
to move ahead with the purchase.
Prior Sale Contingencies The buyer
successfully selling their own home first and by a certain date. ALWAYS make
sure that there is a cut off date that is reasonable.
obvious reasons, most sellers are not too happy about this type of clause, as
the property might not get sold and then they have to begin their marketing all
over again. As a seller, they should consider the market value of the home
being sold vs the asking price – make sure there is a good chance of it
actually being sold. Ask your agent to give you their advice.
sellers will also ask for an “Escape Clause” to be added – In the event of a
better offer being received in the interim.
Contingencies These are
most often repairs that have to be undertaken by the seller by a certain date –
normally prior to lodgement. The clause would then read that the sale is
subject to repairs x, y and z being undertaken by the seller by such and such a
be warned – If you agree to repairs, do them and do them satisfactorily. If you
do not, the sale will fall through and all those involved, banks, attorneys and
agents will come knocking at your door for compensation of costs incurred.