If you have found a home you want to buy, then it is crucial to remember that you should never rush to sign the contract. The realtor may be pushing you to get the sale over the line (and get their commission guaranteed) with tales of other buyers waiting to pounce and market scarcity. While a home does not necessarily need to be for life, it’s typically a long-term purchase where mistakes could prove extremely costly.
Contingency clauses are a way of preventing others from taking the property from under your nose, while still allowing yourself the leeway to retract your offer in certain circumstances. Changing your mind or finding somewhere else you like more are not such reasons. Here are some things that are – provided you make them so via a specific contingency clause.
You cannot secure the funding
Perhaps you were planning to buy the house with the money from the sale of your old one. If your buyer drops out, that could leave you unable to proceed. Maybe it was a mortgage that you were relying on, but the quote you have may not be upheld by the bank when you go to confirm it. They may have had second thoughts, interest rates may have changed or perhaps your income has dropped since you got that quote, so the lender is only willing to lend you a lower amount.
You discover faults with the property
When you agreed to buy the house, you were basing it on the information about its condition that you had at that time. You should always get a professional home inspection done, as these may turn up things that are not obvious, that perhaps even the current owner was unaware of. Many such things could be expensive to put right, so a contingency that allows you to renegotiate the price or pull out if issues are discovered is essential.
Getting legal guidance to ensure any contract you sign is in your interests is wise.