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Do You Know What Your Contingency Is When Buying Or Selling Your Home ?

When you are buying real estate or if you are selling real estate whether it be a home or some land etc.  It is normally and hopefully done with a contract.  Real Estate transactions come with lots and lots of paper.   Under contract law, a contingency provides a party whether that be the buyer or the seller a stipulation to the contract that certain things must happen first before they are bound to the contract.   This is what is know as the contingency period.

con·tin·gen·cy

kənˈtinjənsē/

noun

noun: contingency; plural noun: contingencies

1.

a future event or circumstance that is possible but cannot be predicted with certainty.

Knowing when your contingency period expires is very, very important because this is time you have to make sure that there is nothing to keep you from closing on the transaction.  When making an offer on a house you give a deposit with your offer.  Prior to the contingency period you can cancel for any reason without losing your deposit.  But once you sign off on your contingencies which is “release of contingencies” then it will and can cost you, your deposit.

Also keep in mind that if you happen to be the seller and you sign off on all contingencies you may not have a deposit to lose.  But you did sign a Real Estate contract and the buyer does incur costs in buying your home.  Such as giving notice or a rental truck or what ever it may be.  Lets say that after releasing all seller contingencies you change your mind to sell the home.  The buyer can possible pursue court actions against you for any losses that they may have incurred.

Release of contingencies is very important to know prior to that no money really lost, and either party can back out of the transaction.  After the release the contract does become more binding and someone may lose some money for backing out.

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