Ohio Real Estate Attorney
A Home Sale Contingency Clause in a purchase contract protects the potential buyer of a property from carrying two mortgage payments when they own another property that they are attempting to sell. In the offer phase, a contingency clause can delay the obligation to close on the property while the buyer’s current property remains on the market. The contingency clause typically provides an expiration date for an offer based on an expected sale of the buyer’s current property. In the event the buyer’s current property fails to sell within the designated time period, the offer to the seller is void. If the buyer’s home sells prior to the expiry date, then the ”home sale” contingency has been met, and the transaction moves forward.
A “settlement contingency” is a clause that enables the Buyer to make the finality and the timing of an offer dependent upon the closing of another property being sold by the Buyer. This would apply only in cases where the Buyer making the contingent offer was already under contract to sell their original property. A settlement contingency typically does not allow a Seller to accept other offers while the Buyer’s property closes or for a set period of time.
A “sale and settlement contingency” clause is appropriate in cases where the Buyer making the contingent offer is also attempting to sell another property. Since the Buyer has not yet secured an acceptable offer on their other property, sale and settlement contingencies typically permit the Seller to accept offers from other potential buyers . If the Seller receives a suitable offer from a different buyer, the initial Buyer will typically have the opportunity to waive the contingency and/or otherwise modify their offer in an attempt to maintain first position. sale and settlement contingency including matching or beating the additional buyers offer. If the buyer is unable to remove the contingency, the buyer’s offer becomes null and void. Sale and settlement contingencies often come with earnest money that is returned if the buyer cannot execute the clause because their home has not sold.
Contingency clauses can impede an FSBO Seller in the process to sell your home while you wait for a buyer to settle and close on their property. A few things an FSBO Seller should do before accepting a contingency clause:
A contingency clause can benefit FSBO buyers if your property is not selling quickly at the market price. If your market is slow or your listing has been up for a number of days, a contingency might benefit you.
Contingency Clauses are there to enable buyers and sellers mutual time to sell and acquire properties. Talk to an attorney about the clauses and make sure you include the right language that helps your property sell in the market.
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