As a lawyer, I can advise that a number of contingencies should be included in a real estate purchase contract to protect the buyer's interests. Some of these contingencies include:
- Financing contingency: This contingency allows the buyer to back out of the contract if they are unable to obtain financing for the purchase of the property. This is an important contingency to include as it protects the buyer from being forced to close on a purchase they cannot afford.
- Inspection contingency: This contingency allows the buyer to have a professional inspection of the property completed within a specified period of time. If any significant issues are discovered during the inspection, the buyer may request that the seller make repairs, provide a credit towards the purchase price, or cancel the contract.
- Title contingency: This contingency requires the seller to provide the buyer with a clear and marketable title to the property. If there are any liens, outstanding debts, or other title defects, the buyer may request that the seller satisfy these before closing on the sale.
- Appraisal contingency: This contingency allows the buyer to back out of the contract if the appraised value of the property is less than the agreed-upon purchase price. This protects the buyer from overpaying for the property and ensures that the buyer's lender will not lend more money than the property is worth.
- Disclosure contingency: This contingency requires the seller to disclose any known defects or issues with the property. If the seller fails to disclose an issue and it is discovered after closing, the buyer may be able to sue the seller for damages.
It is important to note that these contingencies are not exhaustive and may vary depending on the jurisdiction and specific circumstances of the transaction. It is recommended that buyers and sellers consult with a licensed attorney to ensure that their interests are fully protected in a real estate purchase contract.
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