Monday, December 24, 2007

Centerpoint Real Estate/Information for the Consumer

REALTY TIMES/Real Estate News and Advice
What Is A "Contingency?

Question: What is a contract "contingency?"

Answer: A sale agreement between buyer and seller typically outlines a series of obligations for each party. Also, usually, a sale agreement has one or more clauses which make the transaction dependent on certain events. Such contract language is a "contingency" and the agreement itself can be seen as a "contingent" arrangement.

For example, you will buy the Smith house if you can get a mortgage at not more than 8 percent and 1 point. If such financing is not available, if the contingency has not been met, then a contingency may provide that the deal will fall through and your deposit will be returned in full.

The words used in a sale agreement outline important rights and terms and should be written and reviewed with great care.

Written by Peter G. Miller.