Contingency clauses in your home purchase agreement are meant to protect you as a buyer. They give you the right to back out or renegotiate the deal if key conditions aren’t met, such as securing financing, getting a clean inspection or meeting appraisal requirements. That way, you’re not stuck buying a home under unfair or risky circumstances.
However, the legal protections offered by these clauses don’t last forever. Each contingency clause comes with a deadline, and it’s something many buyers overlook until it’s too late.
It can cost you big
The consequences of missing a contingency deadline can be serious. For starters, the contingency can be considered waived, given that you didn’t exercise your rights within the allowed time frame. As such, you may be locked into the contract even when new issues arise, like an inspection surprise or a last-minute hiccup with your financing.
If you walk out of the deal after a contingency expires, you risk losing your earnest money deposit or facing legal penalties for breaching the contract. Missing a deadline also shrinks your negotiating power. A seller is far less likely to agree to repairs or price adjustments when they know you don’t have much wiggle room.
Stay on the safe side
Start by marking every important date on your calendar and setting reminders so nothing slips through the cracks. Additionally, never rely on verbal agreements on possible extensions to these deadlines. Get everything in writing to protect yourself in case a dispute arises later.
Lastly, consider getting qualified legal guidance through the entire home-buying process. It can go a long way in avoiding costly mistakes or doing anything that would put your rights or hard-earned money at risk.