Ask Gail: What is a contingency clause in a real estate contract?

ARLINGTON, Texas - Aug. 9, 2015 - PRLog -- Ask Gail, the real estate expert!

Q: What is a contingency clause in a real estate contract?

A: A contingency clause is a condition that must be met in order for a real estate contract to be considered binding. Both the buyer and seller must agree to the terms of the contract, in order for the contingency clause to be valid. If the condition is not met, the buyer or seller may walk away from the contract without any legal consequences. There are a variety of conditions that a contingency could cover. Here are a few of the most common conditions you may come across (or choose to include) in your real estate contract as a buyer or seller:

The buyer has “x” number of days to inspect the property
The buyer has “x” number of days to secure a loan
The buyer must sell current home before purchase of new one becomes final

Contingency clauses are very common in real estate contracts, and when reviewed carefully, can serve to protect both the interests of the buyer and seller.

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