When buying a residential home in Massachusetts, contingencies are essential clauses in your offer that protect your interests. These provisions allow you to back out of the deal under specific circumstances without losing your deposit. Here are the key contingencies to include:
1. Home Inspection Contingency
This contingency allows the buyer to have the property inspected by a professional. If significant issues are discovered, such as structural damage, mold, or plumbing problems, the buyer can negotiate repairs, request a price reduction, or withdraw the offer altogether.
2. Financing Contingency
Also known as a mortgage contingency, this clause ensures that the buyer can secure a loan to purchase the home. If the buyer cannot obtain financing within the agreed-upon timeframe, this contingency allows them to exit the contract without penalty.
3. Appraisal Contingency
An appraisal contingency protects the buyer if the home is appraised at a lower value than the agreed purchase price. If this happens, the buyer can renegotiate the price or terminate the agreement.
4. Title Contingency
This ensures that the seller provides a clear title to the property. If there are liens or other legal issues with the title, the buyer can delay or cancel the purchase until the issues are resolved.
5. Sale of Current Home Contingency
This clause is useful for buyers who need to sell their current home to finance the new one. It states that the purchase is contingent on the successful sale of their existing property.
Why Contingencies Matter
While contingencies protect buyers, they can also make your offer less competitive in a hot market. Discuss your options with your real estate agent/attorney to strike the right balance between protecting yourself and making a compelling offer.
Including these contingencies in your Massachusetts home offer ensures you’re safeguarded against potential risks and can move forward with confidence in your purchase.
