Good Contingencey Clause?

Question

I already have buyers in place but I want to protect myself as much as possible with a contingency clause.

The clause on my contract now states, "The sale of property is contingent upon buyer obtaining third party financing."

Is this sufficient?

Will Barnard · Answer

Yes, but as a seller, I would never accept that contingency. As a seller, I would make sure there is a time limit on each and all contingencies and after that runs out, the EMD goes hard.
Of course we investors know that not all sellers are as knowledgable or sophisticated as we are, but you must be prepared. If you are making a very low offer and want your price, you need to have less contingency time.

Just food for thought.

Chris T. · Answer

Thanks Robert, that helps!

Terry Royce · Answer

I have been using this clause:
"This offer is contingent upon the following terms:
1. Due Diligence:  Buyer has right to conduct any and all due diligence necessary prior to closing."

Would this clause be an all inclusive clause and you could use in financing/inspection/ and or "partner" scenario?

Scott M. · Answer

Well - both.  If you or your "partner" do not want to move forward after an inspection then the deal is void.

You can always make a counter - based on our inspection we dont' accept the current deal but will offer X.

The OP was concerned about backing out because he coudn't get the cash or assign the deal but I suppose it could work either way.

Breau Williamson · Answer

Robert,
Would that make the whole contract void, or just buy you time to change terms or something.

Scott M. · Answer

Well if all you want is a way to back out I would use nationwidepi suggestion with one added word - partner.

This contract (or purchase agreement) is contingent upon buyers partner physical inspection of the property.

Doesn't matter if you have one - or use a different word for partner such as contractor or whatever.

That will cover you.

Chris T. · Answer

Thanks Will!

Chris T. · Answer

Rob Rob...I'm wholesaling the property.

I just want a way to back out if I have to.
What more info do you need?

Will Barnard · Answer

This contract (or purchase agreement) is contingent upon buyers physical inspection of the property.
                    Then stipulate how many days you want that contingency.
          
          Or
          This contract is contingent upon buyer's inspection period of x days.
          
          Note: This is not legal advice and I am not a lawyer. Please consult your own attorney. This is not to be construed as legal advice.

James Hiddle · Answer

A good inspection clause would suffice.