Real estate contingencies are provisions that allow parties to cancel a contract if certain conditions are not met. At RS Law Group, we help our clients avoid the legal pitfalls that often cost real estate investors thousands or major time delays in closing.
While contingencies protect both the buyer and the seller, they can also lead to expensive real estate legal disputes and major delays if not handled properly. Here are some of the most common real estate contract contingencies in Philadelphia real estate contracts and how to avoid legal issues with them.
Common Types of Contingencies in Real Estate Contracts
Real estate contracts in Philadelphia typically include several contingencies, such as financing, inspection, and appraisal contingencies. Financing contingencies allow buyers to cancel the contract if they cannot secure financing for the property. Appraisal contingencies allow buyers to cancel the contract if the property does not appraise for the purchase price. Inspection contingencies, however, are the most common and often lead to costly legal issues.
Understanding Pennsylvania Inspection Contingencies
Inspection contingencies give buyers the right to inspect the property and request repairs or credits before closing. If the seller does not agree to the buyer’s requests, the buyer can cancel the contract. Inspection contingencies protect buyers from purchasing a property with hidden defects or safety hazards. However, they also give buyers significant leverage over sellers, since sellers may be eager to avoid losing the sale.
Real Estate Inspection Contingency Period and Deadlines
Inspection contingency periods typically last between 7 and 14 days after the contract is signed. During this period, the buyer must hire a home inspector and review the inspection report. The buyer must then provide the seller with a list of requested repairs or credits within the deadline specified in the contract. The seller can either agree to the buyer’s requests, negotiate a compromise, or refuse the requests and risk losing the sale.
What Happens if the Buyer Doesn’t Respond after the Home Inspection?
If the buyer misses the deadline for requesting repairs or credits, the seller can assume the buyer is satisfied with the property and move forward with the sale. However, if the buyer requests repairs or credits and the seller agrees, the seller must complete the repairs or provide the credits before closing. If the seller refuses to make the requested repairs or provide the credits, the buyer can cancel the contract.
Tips for Avoiding Common Inspection Contingency Issues
To avoid issues with inspection contingencies, buyers should hire a reputable home inspector and review the inspection report carefully. Buyers should also be realistic in their requests for repairs or credits and prioritize safety hazards and major defects. Sellers should be proactive in addressing any known issues with the property before putting it on the market. Sellers should also be willing to negotiate with buyers and make reasonable repairs or provide credits to keep the sale on track.
The Importance of Having a Real Estate Attorney or Lawyer in Philadelphia
Real estate contracts can be complex, and contingencies can lead to disputes and legal issues. It’s important for buyers and sellers to have a real estate attorney or lawyer in Philadelphia to review the contract and advise them on their rights and obligations. An attorney can also help resolve disputes and negotiate with the other party if issues arise.
If you are looking for an experienced real estate lawyer you can trust in the Philadelphia or surrounding Pennsylvania area, we are here for you. RS Law Group has helped countless Pennsylvania real estate investors successfully prepare contracts and close on properties. Contact us now at 215-717-2200 or email us at contact@rslawgroup.com for a free consultation.
Other Contingencies to Consider in a Pennsylvania Real Estate Contract
In addition to inspection, financing, and appraisal contingencies, buyers and sellers in Pennsylvania should also consider other contingencies, such as title contingencies and zoning contingencies. Title contingencies protect buyers from purchasing a property with title defects or liens. Philadelphia Zoning contingencies protect buyers from purchasing a property that cannot be used for their intended purpose due to zoning restrictions.
How to Navigate Contingencies in a Philadelphia Real Estate Contract
Navigating contingencies in a Philadelphia real estate contract requires careful review and negotiation. Buyers and sellers should work with their real estate agent and attorney to ensure that the contract is fair and enforceable. Buyers should be aware of their rights under each contingency and be prepared to act if issues arise. Sellers should be proactive in addressing known issues and be willing to negotiate with buyers to keep the sale on track.
Free Consultation with RS Law Group Real Estate Attorneys
If you are looking for an experienced real estate lawyer you can trust in the Philadelphia or surrounding Pennsylvania area, we are here for you. RS Law Group has helped countless Pennsylvania real estate investors successfully prepare contracts and close on properties. Contact us now at 215-717-2200 or email us at contact@rslawgroup.com for a free consultation.