Most Purchase Agreements Are Contingent on What 2 Items

Most Purchase Agreements are Contingent on What 2 Items

When it comes to purchasing real estate, many people may assume that once a buyer and seller agree on a price, the deal is done. However, in reality, most purchase agreements are contingent on certain items that must be met before the sale can be completed. In this article, we will explore the two most common items that purchase agreements are contingent on.

1. Home Inspection

The first and most important contingency in a purchase agreement is the home inspection. A home inspection is an assessment of the condition of the property being sold. It includes a comprehensive look at the heating and cooling systems, electrical and plumbing systems, roof and foundation, and overall structure of the home. The purpose of the home inspection is to give the buyer a clear understanding of the property`s condition and any potential issues that may need to be addressed.

If the home inspection reveals any major defects or issues, the buyer can request repairs or a credit to cover the cost of repairs. If the seller agrees to the request, the purchase agreement can continue as planned. However, if the seller refuses to make the repairs or offer a credit, the buyer can choose to terminate the agreement, and the seller must return the buyer`s deposit.

2. Financing Contingency

The second most common contingency in purchase agreements is the financing contingency. This contingency protects the buyer in the event that they are unable to obtain financing for the purchase. The financing contingency outlines the type of financing the buyer will use to purchase the property, the interest rate, and the loan amount.

If the buyer is unable to secure financing within the specified time frame, the purchase agreement can be terminated, and the buyer`s deposit will be returned. It`s essential for buyers to make sure they have pre-approval from a trusted lender before entering into a purchase agreement.

In conclusion, most purchase agreements are contingent on a home inspection and financing. These contingencies are in place to protect buyers and ensure that they are making an informed decision and can obtain financing to complete the purchase. As a buyer, it`s essential to understand these contingencies and work with a trusted real estate agent to help navigate the purchase process.