Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
EXPECT MORE
Contract Contingencies… What are they?
Regardless of which side of the transaction you are on, it is the conditions that must be met before the sale is finalized
What Is a Contingency?
In a real estate contract, a clause outlines the rights and obligations of each party. A contingency, on the other hand, is a specific condition that must be fulfilled for the contract to move forward. Both buyers and sellers must agree to and sign off on any contingencies before they are legally binding.
Because these terms can affect your rights and responsibilities, it’s always wise to have a real estate attorney review your contract before you sign.
Here is a list of some common Contingencies and Clauses in Real Estate Contracts
While every transaction is unique, here are some of the most common contingencies and clauses you may encounter:
Financing Contingency
Allows buyers a set period of time to secure a mortgage loan. If financing falls through, this clause helps protect the buyer’s earnest money deposit.
Appraisal Contingency
Ensures the home’s appraised value is equal to or greater than the agreed purchase price. Lenders typically won’t approve loans for more than a home’s appraised value. Youe trusted real estate advisor can help you navigate this.
Inspection Contingency
This gives buyers the right to have a professional inspection to evaluate the home’s condition. Buyers can request repairs, renegotiate the price, or even cancel the contract based on the results. It is my job to help negotiate these issues.
Home Sale and Home Close Contingencies
A Home Sale Contingency gives buyers time to sell their current home before buying a new one.
A Home Close Contingency allows time to complete the closing of that sale before finalizing the new purchase.
Title Contingency
Protects buyers by allowing a title search to confirm the seller’s ownership and ensure there are no liens or legal disputes against the property. Lenders require this, and even all-cash buyers should order one.
Homeowners Insurance Contingency
Requires buyers to secure homeowners insurance before closing. This protects both the lender’s and buyer’s investment.
HOA Contingency
Applies to homes within a homeowners association. Buyers have time to review HOA financials, bylaws, and rules before finalizing the purchase.
Early Move-In Clause
If sellers agree, this clause allows buyers to move in before closing. Terms and responsibilities—like rent and liability—should be clearly outlined. I am here to help negotiate an agreable plan for all.
Property Condition Disclosure
Most states require sellers to disclose known property defects or hazards. For homes built before 1978, federal law mandates disclosure of any known lead-based paint hazards.
Continue-to-Show and Kick-Out Clauses
If sellers accept a contingent offer, they may continue showing the home. A Kick-Out Clause lets them accept another offer if the original buyers can’t remove their contingency within a specified time.
Rent-Back Clause
Sometimes sellers need to stay in the home briefly after closing. A rent-back clause allows them to do so under agreed rental terms and a defined move-out date.
This can be negotiated by me.
What Happens if a Contingency Isn’t Met?
Each contingency should include a timeline. If a condition isn’t satisfied within that period—and both parties are acting in good faith—the contract may be canceled without penalty.
Including the right contingencies helps protect your financial and legal interests whether you’re buying or selling a home.
Work With a REALTOR® for Guidance (important!)
As your real estate agent and trusted advisor, I am your partner throughout the process, helping you navigate offers, contingencies, and negotiations. A real estate attorney can provide legal insight into your specific requirements. A real estate advisor can keep the deal moving forward, solving many varied issues as they come up.
By incorporating my personal attention and guidance into the marketing strategy I aim to provide you with
an Exceptional Selling Experience
while ensuring that your property receives the exposure needed
to attract buyers from anywhere
LIVE. LIFE. LOVE. LOCAL.
Your Local Real Estate Connection
Get a positive, helpful partner for buying or selling your home:
Trusted resource for answers about the process
Innovative marketing strategies
Expertise about neighborhood features
Ability to target home searches
Strong negotiation skills
Support through the closing and beyond
Why would you settle for anything less?
Adding value for my clients and loving where we live!
Judy@JudithSutton.com
COLDWELL BANKER...GUIDING PEOPLE HOME SINCE 1906
908 803-0472
"...the right relationship means everything..."
SERVING THE SOMERSET HILLS AREA ONE CLIENT AT A TIME
Service & Experience
since 1983
Note:
Only professionals who are members of the National Association of REALTORS® (of which I have been a member since 1983) may use the title REALTOR®. REALTORS® follow NAR’s Code of Ethics, and which requires me to act in my clients’ best interests and treat all parties fairly.