Contingent offers in real estate contracts require certain conditions to be met before closing. A study by the National Association of REALTORS® found that only 5% of purchase agreements were terminated before closing in July 2021. This statistic indicates that the chances of losing a deal due to contingencies are relatively low. Common contingencies include financing contingencies, which require lender approval, and others that may relate to the condition of the property. Buyers have the option to back out of agreements if inspections reveal issues that affect these contingencies.
In July 2021, 5% of all purchase agreements over the past 3 months were terminated before they could reach closing, showing that most deals proceed successfully.
Contingent offers involve agreements between buyers and sellers that require certain contingencies to be met before the deal can close, impacting the transaction's outcome.
Common contingencies include financing contingencies, which make the buyer's offer dependent on lender approval, ensuring buyers don't commit to transactions they can't finance.
If an inspection report reveals issues that breach contingencies, like knob and tube wiring in older homes, buyers can back out unless sellers comply with necessary updates.
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