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Buyer Beware: Including Certain Contingencies In Your Purchase Agreement Can Save You In A Real Estate Deal.


So you just found a great, mixed-use piece of real estate that you want to purchase as an investment. You decide to have your real-estate agent submit a written offer on the property. Afterwards, you start to think to yourself: What happens if I can’t get a mortgage? What if the building is falling apart? What if there are hazardous materials below ground?

The good news is that you can address these concerns and limit your risk by making sure that certain contingencies are built-in to your purchase agreement.

Contingencies To Consider:

1: Mortgage Contingency:
-Buyer’s obligation to complete the deal depends on getting financing from a lender
-Tip: Include a maximum interest rate that Buyer is willing to pay

2: Inspections/Due Diligence:
-Build in enough time to allow for Buyer’s property inspections, environmental inspections and review of key documents such as existing leases, survey, title report and any specific testing reports (well-water, septic, mold etc.)
-Tip: Include language stating that Buyer has the right to terminate the Agreement for any reason during the Due Diligence period.

3: Approvals/Permits:
-Include language stating that Buyer can terminate the Agreement and receive deposit back if unable to obtain necessary approvals (zoning, construction, etc.) within a certain period of time.

These are just some examples of common contingencies that can help to limit a Buyer’s risk in a real estate transaction.


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