Whether you are buying your forever home, a vacation home or you are downsizing to a smaller home, one section of your purchase agreement will likely contain contingencies. Contingencies benefit buyers in Illinois by permitting them to cancel the purchase agreement if the contingency is not met. What contingencies are available is dependent on state law, but there are some contingencies that are common to all states and can fall under monetary contingencies and health-related contingencies.
Common monetary contingencies
The following are some common monetary contingencies. Loan contingencies can make a contract void if the buyer is denied a mortgage. Contingencies can also be made stating that the contract will only be valid if the buyer sells their current home.
Inspection contingencies are also common. If a house is inspected and it shows the house is damaged, unsafe or there is a cloud on the title, the contract can be void. This also applies to termite inspections, roof inspections and sewer inspections. Keep in mind this list is not all-exhaustive.
Common health-related contingencies
The following are some common health-related contingencies. These contingencies are generally based on a home inspection. For example, a home inspection can reveal radon, mold or asbestos. The purchase agreement can have contingencies stating that if one of the above problems are found, the agreement is void unless the seller fixes the problems or otherwise removes the defect. Other common health-related inspections include inspections for lead-based paint and private well inspections. These are only some examples of common health-related contingencies; there are others.
Contingencies protect buyers
Purchase agreements often contain contingencies that protect buyers. If the contingency is not met, the buyer can walk away from the agreement without penalty. Contingencies vary from state to state, so it is good to know what contingencies are available to suit your needs when entering a purchase agreement or a similar real estate transaction.