A real estate contingency is a provision in a contract that allows buyers to back out of the deal if certain conditions aren't met. Usually, contingencies are included to protect the buyer in case something goes wrong during the homebuying process. For example, a buyer might include a contingency that allows them to cancel the contract if they are unable to secure financing. Contingencies can also be used to address other issues, such as a problem with the home's title or a major repair that needs to be made. While contingencies offer buyers some peace of mind, they can also be used by sellers to their advantage. For instance, a seller might include a contingency that allows them to keep the deposit if the buyer backs out for any reason other than an issue with the property. As a result, it's important for buyers to understand how real estate contingencies work before they enter into a contract.
A contingency is a condition that must be met in order for a contract to become binding. For example, a buyer may agree to purchase a piece of property, but only if the seller can obtain financing within a certain period of time. Similarly, a seller may agree to sell goods at a discounted price, but only if the buyer agrees to purchase a minimum quantity. In each case, the parties have agreed to enter into the contract, but the completion of the deal is contingent upon the satisfaction of certain conditions. While contingencies are often used in real estate transactions, they can be included in any type of contract. As such, it is important to carefully review any contract before signing it, in order to ensure that all contingencies are acceptable.
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