Contingencies in real estate contracts - Your James Island Realtor

In the state of South Carolina, the Agreement to Buy and Sell Real Estate contains the most common contingencies as it is written. A contingency is a clause within the contract that gives either the buyer or the seller a way to get out of the contract if certain conditions or timelines aren’t met.  The most common contingencies are financing, appraisal, inspection and a clear CL100 (excessive moisture and termite report).  Another contingency that sometimes comes into play is a buyer making an offer on a new home before selling their existing home.  The buyer needs to sell the present home before being able to obtain financing for the new home.  So the offer made is contingent upon the sale of the existing home.  There will always be a time period or a kick out clause associated with such a contingency.  If the buyer is able to sell the home within the agreed upon time frame, the deal can move forward.  But if the property fails to sell within the specified time period, the seller has the option of releasing the contract.  In many cases, a seller will not accept this kind of contingency, because they feel it is possible to find another buyer capable of closing the deal without needing to sell another home first.  But new home builders are often willing to accept an offer contingent upon the sale of an existing home.

Every contract is unique.  The possibilities for contingencies are virtually endless.  Some of the more commonly used contingencies would include:

Financing.  This contingency depends upon the buyer being able to obtain financing and is very common.

Home Inspections.  Probably the most common type of contingency is “contingent upon Buyer's satisfaction with the results of the home inspection”.  This refers to an inspection by a qualified home inspector who will evaluate the home and give a professional opinion for hidden defects within the HVAC, plumbing, appliances and electrical as well as the integrity of the roof and the dwelling itself.  Other more indepth inspections may include those for the presence of radon, mold or lead based paint. 

Appraisal.  Unless it's a cash deal, the lender will require an appraisal.  A formal appraisal ensures the value of the property at or above purchase price.  Sometimes the cash buyer also wants to have an appraisal.  In this case, the seller usually agrees. 

Every part of a real estate contractin South Carolina, including James Island, is negotiable.  Before signing be sure that you understand the contingencies and are comfortable with all parts of your contract.  Take time to think about what contingencies you might like to have added and discuss the advantages and disadvantages with your Realtor.