How sellers can add a contingency clause to a purchase agreement

If the sale of your home is contingent on you finding a new place to live, buyers may be dissuaded from making a bid. How­ever, this clause doesn’t have to be a hindrance. Here’s how to best include this type of contingency in a purchase agreement.

Make it clear

Ensure that the contingency clause is as clear as possible. One of the main concerns buyers have with regards to these clau­ses is that they’re vague. Understanding the specific circumstances in which a seller may back out is likely to reassure buyers, as they’ll know what they’re signing up for. 

Specify time frames

Provide a clear time frame within which you’ll find your new home. Then, determine how this con­tingency relates to other contingencies in the contract, such as those buyers generally include for things like home inspections. 

Typically, the contingency of the seller finding a new home will take precedence on the buyer’s contingencies. In particular, if the buyer has asked for an appraisal or inspection and has specified a time frame within which to complete these, the countdown on finishing them won’t begin until after the seller has found a new property.

Finally, be clear about the seller’s right to extend the closing date should they fail to find a new home within the time originally specified.

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