Today’s what would you do is about a clause in a real estate contract called the contingency. I call it the Contingency Dilemma.
If you’re not familiar with a contingency let me explain. A contingency is a condition placed on the sale or purchase of a property. This condition must be met before the transaction can go through.
Sometimes a party to the contract will ask for a waiver of the contingency. This creates a contingency dilemma. The seller or buyer must ask themselves, “Do I keep the contingency or remove it?
The Setup
In this situation, the seller is also a buyer. He has a property, which we will call Property A for sale. He is also in the market to buy a property. We will call this Property B.
He needs to buy Property B before he can sell Property A. Both properties are homes. He is moving from one home to another. This makes these transactions critical.
The Contingency Dilemma
The seller placed a contingency in the sales contract. It stated that the purchase of Property B must happen before the sale of Property A. Unless this condition is met, there will be no sale. The buyer of Property A signed the contract knowing this contingency exists.
All is going well until the seller of Property B delays the sale. Our seller/buyer has a problem. The buyer of Property A is ready to close the deal. The closing date has been set but the sale of Property B is delayed.
The Request And The Options
The buyer of Property A asks the seller to waive the contingency. He wants to proceed with the sale. The seller contemplates the request. He does not want to lose this buyer. If he does it may take quite a while to get a new one. If the sale of Property A goes through and he has not bought Property B he will have no place to live.
What would you do?
Let’s hear what you feel is the best course of action. Leave your comments below, then click here to read what happened.
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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