A home purchase agreement is a legal contract between a buyer and a seller that lays out the terms and conditions of the sale of a property. Contingencies in a home purchase agreement are provisions that must be met before the sale can be finalized. These contingencies protect both buyers and sellers from potential losses and can include things like inspection contingencies, financing contingencies, and appraisal contingencies.
When it comes to purchasing a new home, there are several unique contingencies that buyers should be aware of. Here are some of the most important ones:
1. Builder`s Warranty: Most new construction homes come with a builder`s warranty that covers defects in materials or workmanship for a certain period of time. This warranty should be included in the purchase agreement and should specify the length of the warranty and what it covers.
2. Completion Date: When purchasing a new construction home, it`s important to have a contingency that specifies the completion date. This ensures that the home will be ready for move-in on a specific date and gives the buyer leverage in the event of any delays.
3. Walk-Through Inspection: Prior to closing, buyers should have the opportunity to do a walk-through inspection of the property to ensure that everything is in working order and that there are no issues that need to be addressed. This contingency should be included in the purchase agreement.
4. Contingent on Sale: If a buyer needs to sell their old home before purchasing a new one, they can include a contingency in the purchase agreement that makes the sale contingent on the sale of their current home. This ensures that the buyer won`t be stuck with two mortgages if their old home doesn`t sell in time.
5. Homeowner`s Association Approval: If the property is part of a homeowner`s association (HOA), there may be a contingency in the purchase agreement that requires the buyer to obtain approval from the HOA before closing. This can include things like approval of the buyer`s financial status, background checks, and adherence to HOA rules and regulations.
In conclusion, purchasing a new home can be exciting, but it`s important to have contingencies in the purchase agreement that protect both the buyer and the seller. By including contingencies for things like warranties, completion dates, inspections, and HOA approval, buyers can ensure that they`re getting what they paid for and that they`re protected from potential issues or losses.