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In real estate, a contingency is a condition included in a home purchase agreement, that must be completed before a deal can actually be finalized. If either party is unable to meet one, or more, of the contingent conditions, then the deal may be voided altogether. If you are buying a home in Wisconsin, you need to be aware how contingencies can be used to help you complete your purchase.
Contingencies for Homebuyers
Inspection: Generally, an inspection contingency will give the prospective homebuyer a chance to conduct a thorough review of the property in order to determine if any repairs will be needed. If problem areas are identified, this contingency provision will give the buyer an opportunity to enter into further negotiation, or if necessary, will slow for the termination of the agreement.
Sale of current home: Many Wisconsin homebuyers are also selling their previous home. It might make sense to consider a contingency that requires that your prior home gets sold before a new home purchase is finalized. In general, sellers strongly disfavor sale contingencies, but in some situations they might make sense.
Free and clear title: This is extremely important, you should never agree to a contract without a contingency that gives your Wisconsin real estate attorney a chance to perform a comprehensive title search. This will ensure that the history of ownership is clear and that the property is free of any liens.
Appraisal: Finally, it is frequently a good idea to get a home appraised before finalizing the purchase agreement. An appraiser can give you an independent assessment on the fair market value of the home. If your purchase price is well above the appraised price, it might make sense to re-negotiate the contract.
How to Effectively Use Contingencies
Ultimately, for homebuyers, contingencies are an important legal tool. Contingencies help ensure that you are protected under the Wisconsin real estate statutes. The last thing you want is to get stuck with a new home that immediately needs major, and unexpected, repairs. When used properly contingencies can also be a useful negotiating tool. For example, imagine a scenario where you include a contingency that allows you to fully inspect the home. During the inspection, you determine that there are some issues and that the home will need around $10,000 repairs. The contingency protects you from just simply being stuck with those repair costs, but beyond that, what happens next? Maybe you will want to back out of the deal entirely, deciding that those repairs are indicative of greater problems, or, maybe you will want to use the information to re-work your home purchase agreement. You may be able to get the seller to pay for the entirety of the repairs, or you may be able to get the seller to reduce the purchase price as compensation for the problems. Regardless, your real estate lawyer can help you draft a home purchase contract that fully protects your interests and allows you to make the best deal possible.
Need Legal Help?
Buying a home is the most significant purchase that most people ever make. Prospective Wisconsin homebuyers need to know how to protect themselves. By working with an experienced Wisconsin real estate lawyer you may be able to save yourself thousands of dollars in the long run.