CONTINGENCIES: TAKING A CHANCE AND WINNING IN THE END!

Most people don't understand what a contingency really means.  To most, a contingnecy means that something will happen after something else happens.  While that is true, there's more to it.  What contingency really means is that something will happen after AND ONLY IF something else happens.  It is a CHANCE that something will happen. 

Most contracts will simply become void if the contingency doesn't occur, which is sometimes not evident until closing day!  This is usually the case in a contract that is contingent upon the buyer's current home closing.   But contingencies can be so much more than a home closing.  Contracts can be contingent upon the buyer receiving a job offer, the successful relocation of the buyer to the home's area, the buyer receiving an anticipated inheritance or other source of funds, or even upon the buyer passing a law exam (or any other professional exam).

So what happens if the contingency is not met?  Well, that depends on how the contract is written.  Contingencies can be effective and productive if properly constructed.  It is important to understand what will happen if the contingency does not occur.  Is there a controlling date for the contingency?  Does the contract terminate or simply become void?  Where does the earnest money go if the contingency is not met?   Whether you are the buyer or the seller, a properly constructed contingency with a clear direction on what happens with the earnest money if the contingency does not occur, as well as clearly defined dates and deadlines satisfactory to all parties, could be the difference between a successful transaction and one that ends up in mediation or, worse, litigation.

Don't be afraid to offer or accept a contingency in your real estate transaction, just be sure to understand all possible scenarios and how you are protected under the terms of the contract.

CONTINGENCIES:  TAKING A CHANCE AND WINNING IN THE END!