Contingencies in a purchase agreement.
These are the clauses that allow a buyer to exercise their due diligence on many aspects of the Ann Arbor home purchase. These clauses have performance timeframes that the due diligence must be practiced within. Some contingencies, place a burden on the seller to perform, before the buyer’s timeline kicks in. For example, a seller need to provide any municipally required well & septic reports to the buyer within 7 days of acceptance of a purchase agreement. The buyer then has 7 days to respond to any findings within those reports, or the contingency is deemed waived.
Common contingencies in a purchase agreement:
- Contractor’s inspection
- Lead based paint inspection
- Well & septic inspection
- Attorney review
- Purchase agreement
- Title work
- Homeowner association documents
- Private road agreement
If you are submitting an offer while attempting to sell your own home, there are two other contingencies that can be exercised. The first is a purchase contingent on the sale of your own home. All of them are predicated upon having your own home the market within x days of final acceptance. There are three conditions that can be chosen for this contingency:
- Obtained a sales contract on your property within x days of final acceptance;
- Obtaining a non-contingency sales contract within x days of final acceptance;
- Closing on your property within x days of final acceptance.
The second contingency is something a seller would likely choose to enforce performance of buyer sale contingency. It states that the seller’s home remains on the active market, until you remove the Sale of Buyer’s property contingency. If an offer comes in before that contingency is removed, you as the primary offeror will have x days to remove all contingencies on the purchase. Failure to remove them all means that the purchase becomes null and void.