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Types of contingency clauses used in real estate contracts

Contingency clauses are commonly used in real estate contracts and for various reasons. There are different types of these clauses and not all of them will be used in every contract written. Contingency clauses help protect both the buyer and the seller should either party wish to back out of the contract to buy or sell a piece of property in Charlotte, North Carolina.

The most common type of contingency clause is the mortgage contingency. This clause gives the potential buyer time to acquire a mortgage to buy the property. The clause makes it known that the buyer can back out of the property purchase should they not be able to acquire the financing required to buy the home.

The house sale contingency is included in almost every real estate contract where the property buyer is relying on the sale of their current home in order to buy the new one. Should the sale of their current home fall through, the contingency clause would allow them to back out of this contract without being penalized.

An inspection contingency is always included in real estate contracts. This contingency allows the buyer to end the contract if the inspection of the property fails or does not come back with satisfactory results.

A kick-out contingency clause is often added to a real estate contract that also has a house sale contingency. This contingency allows the seller to continue to list the property on the market while under contract in the event that the buyer backs out of the purchase because the sale of their house falls through.

The contingency clauses explained in today's post are most often used in real estate contracts throughout Charlotte. Make sure you know the meaning of any clause added to your contract and what it prevents you or permits you to do.

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