A lot of things could go wrong when buying a house. While you could spot most of them given sufficient time, the pressure of the market often means you have to act fast to secure the property you want.
This is where contingency clauses can help. They allow you to put a hold on a place you like to prevent another buyer from taking it while buying yourself time to carry out further checks. Most importantly, they allow you to retract your offer without penalty in certain circumstances.
What those circumstances might be depends on which contingencies you insert into the purchase agreement. Examples could include:
A finance contingency
Perhaps your purchase depends on securing a mortgage and selling your current home. If the mortgage lender withdraws or changes their original offer, or the buyer you have lined up for your home pulls out, then you may need to pull out due to an inability to fund the purchase.
A survey contingency
Commissioning an in-depth survey is crucial to spot problems with a property before they become your problems. Even if the building is sound, there may be issues with the soil it stands or the area it is situated in. A survey can help you discover such things. Only once you understand the issues can you make an informed decision about whether to proceed or back out.
A title contingency
Not everyone who puts a property up for sale has the right to sell it. You need to be sure that once you pay for it, no one can contest your ownership rights. If there are outstanding title issues, whether known to the current owner or not, they need resolving before you commit.
Learning more about other possible contingencies can help you understand what you need to do to protect yourself when looking to buy a property.
