When buying a property, the real estate contract is one of the most important documents to be executed. This document outlines the conditions and contingencies of the sale and can spell out what happens in different situations. Buyers need to have their contracts thoroughly reviewed by their real estate lawyer before signing. To learn more about the attorney review process, you can read our post, Understanding Attorney Review.
Buyer Contingencies Every Contract Should Include
If you are buying a home, there are a few common contingencies that should be included in your real estate contract.
INSPECTION. One of these is the inspection contingency. This clause allows the buyer to have a professional inspection of the property, to ensure that it is in good condition. If there are any problems with the property that are not disclosed by the seller, the buyer can back out of the sale. With the contingency in place, the buyer can also attempt to negotiate a lower purchase price based on the findings of the inspection, request a credit at closing, or request that the seller make the necessary repairs.
FINANCING. Another common contingency is the financing contingency. This clause protects the buyer if they are unable to secure financing for the purchase. If the buyer is not able to get a loan, they can back out of the sale without penalty. This contingency is important to have in place, as it can be difficult to obtain financing on a home, particularly in today's market.
APPRAISAL. The appraisal contingency is another clause that should be included in your real estate contract. This allows the buyer to have an independent appraisal of the property done, to ensure that they are paying a fair price. If the appraised value of the property is lower than the agreed-upon purchase price, the buyer can back out of the sale.
TITLE. Finally, the title contingency protects the buyer in case there are any problems with the title to the property. If there are any liens or encumbrances on the property, the buyer can back out of the sale. This contingency is important to have in place, in order to protect the buyer's investment.
Conclusion
If you are buying a home, it is important to have the proper contingencies in place. The most common contingencies include inspection, financing, appraisal, and title. Having these contingencies in your contract will help protect you as a buyer and ensure that the sale goes smoothly.
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As with any legal issue, it is important that you obtain competent legal counsel before making any decisions about how to respond to a subpoena or whether to challenge one - even if you believe that compliance is not required. Because each situation is different, it may be impossible for this article to address all issues raised by every situation encountered in responding to a subpoena. The information below can give you guidance regarding some common issues related to subpoenas, but you should consult with an attorney before taking any actions (or refraining from acts) based on these suggestions. Separately, this post will focus on New Jersey law. If you receive a subpoena in a state other than New Jersey you should immediately seek the advice of an attorney in your state as certain rules differ in other states.