How Contract Contingencies Protect Bucks County Buyers

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The Pennsylvania Agreement of Sale is a 13-page document that offers certain protections to home buyers so you can make an informed decision. These protections are called contingencies, and buyers have to meet certain timeframes in order to utilize them. There are four common contingencies that you might see in your contract.
 
1. Mortgage contingency. This is the most common contingency. Basically, you have to be able to obtain a mortgage based on the established terms in the agreement. This contingency usually includes a subset that requires the bank to order an appraisal. However, as long as you have this contingency, even if the home doesn’t appraise, you will be protected so long as you file your loan application on time.

2. Home inspection contingency. While you should always get a general home inspection, there are other inspections you can ask for as well, such as radon tests, termite inspections, and swimming pool inspections. When the inspection report comes back, you can negotiate with the seller, take the property as-is, or walk away from the transaction as long as the inspections are completed on time.

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AS LONG AS YOU STICK TO THE TIMELINE, YOU WILL BE PROTECTED BY CONTINGENCIES.

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3. Insurance contingency. Most people forget about this one. You have the right to see if the house can be insured at the usual and customary rates. Recently, I encountered a seller who had filed so many insurance claims on the property that it was very difficult for my buyer to obtain home insurance. This contingency protected my buyer.

4. Homeowners Association contingency. It is the seller’s obligation to disclose the rules and regulations of the community to the buyer. The buyer then has five days to decide whether or not they can comply with those rules. If not, you do have the right to terminate the contract based on the rules and regulations of a planned community.

Remember, this is not an all-inclusive list. There are many other contingencies that protect the buyer, but these are the most common. If you are interested, I can send you a Consumer’s Guide to the Agreement of Sale, which goes through the contract line by line and explains all the elements of the agreement.

If you have any questions about this topic, give me a call or send me an email. I would be happy to help you!