COVID-related contingencies in OTP contract

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COVID-related contingencies in OTP contract

Annchen Knodt
Investor · Durham NC (and Brenham, TX) · Member since 2018 · 301 posts · 197 votes

Hi BP,

Though I'm tightening my criteria and making fewer offers as we wait to see how this unfolds, I want to be sure I'm covering my bases in any offers I make so I don't end up in any tight spots due to issues that arise from the coronavirus situation (e.g., delays in inspection, appraisal, financing, etc).  I've seen/heard folks mention here and there that they are putting in additional contingencies in their offers these days, but wanted to ask if anyone wouldn't mind sharing some details and/or experiences with what they're including.  I'm new-ish to investing so any and all advice is appreciated!

Thanks!

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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Annchen Knodt:

    Hi BP,

    Though I'm tightening my criteria and making fewer offers as we wait to see how this unfolds, I want to be sure I'm covering my bases in any offers I make so I don't end up in any tight spots due to issues that arise from the coronavirus situation (e.g., delays in inspection, appraisal, financing, etc).  I've seen/heard folks mention here and there that they are putting in additional contingencies in their offers these days, but wanted to ask if anyone wouldn't mind sharing some details and/or experiences with what they're including.  I'm new-ish to investing so any and all advice is appreciated!

    Thanks!

    Hello Annchen, 

    There is a COVID-19 contract addendum being used in New York purchase contracts. The addendum essentially allows purchasers and sellers to back out at any time of the contract... I spoke with one of our attorneys last night and he said - it basically makes the contract worthless.

    On a good note, this will protect you should any major changes happen during the escrow period. On the other hand, it could give the seller of your deal a free pass to just walk out at any time for any reason.

    Attached is a screenshot of the addendum.

    Best of luck to you moving forward!

    Abel

    REbuild Team - eXp Realty5234 Reviews
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  • Annchen Knodt
    OP
    Investor · Durham NC (and Brenham, TX) · Member since 2018 · 301 posts · 197 votes
    6y

    Thanks @Abel Curiel, it's super helpful to see an example!  Best of luck to you as well!

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