9 Common Real Estate Contract Conditions
Contracts for purchase/sale of property often contain several “contingent” terms, particular obligations or conditions precedent to the obligation of a party to perform under the terms of the contract. Frequently, these conditions involve the buyer’s verification of certain stated facts or the seller’s performance of certain acts or the happening of some event by a specified date.
The following are some of the specific conditions typically found in a sales contract:
- That the buyer obtain financing for the purchase;
- That the buyer inspect the property for structural adequacy or pest infestation;
- The seller’s lender approving the purchase price, terms of the contract, accepting a payoff for an amount which is less than the balance due on a loan and releasing and providing a satisfaction of mortgage (Short Sale transaction);
- That a survey be obtained verifying the property boundaries and absence of encroachments;
- That the seller make certain repairs or improvements;
- That the buyer sell his or her present home before closing on the new real estate;
- That the buyer be approved by a condominium or homeowner association before closing;
- That the seller provide evidence of marketable title before closing; and
- The contract be approved either or both parties’ attorneys within days of signing the contract.
If the buyer fails to comply with its obligations by a stated date, it may be construed as a waiver of the condition precedent by the buyer. Likewise, if the seller does not timely perform, as provided or the event does not happen, the buyer may waive the condition and proceed to closing. A waiver by the buyer may preclude his or her later cancellation of the contract based on the failure of the condition.
This is only a general description of common conditions related to real estate contracts in Florida. We recommend you consult with an experienced real estate lawyer for professional advice as each circumstance is unique.
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