How Contingencies and Disclosures Work when Buying a Home
Purchasing an Illinois home involves a major investment, so you want to make sure you do your due diligence before making an offer on a particular property. Before making things official, you may have to sort through a series of contingencies and disclosures. Contingencies help protect you when certain circumstances arise along the way, while disclosures refer to the defects or other things about a property the seller has to tell you.
According to NerdWallet, contingency clauses give you a way out of a residential real estate deal if specific conditions never occur. Disclosures give you an opportunity to reject a particular deal if the defects or other problems are of significant concern.
An appraisal contingency clause dictates that you plan to buy a home as long as if appraises for a minimum value. This type of clause protects you in the event that the property appraises for below market value.
A mortgage contingency is another common type. This contingency clause asserts that you plan to go ahead with a home purchase as long as you are able to get funding for it. An inspection contingency, meanwhile, says that you are going to buy a home as long as it passes inspection.
Your seller must disclose whether there are any major environmental concerns or hazards associated with a home you plan to buy. If there is a high chance of earthquakes, flooding or similar issues, the seller typically must disclose this to you. Similarly, if the home has a high presence of radon, the seller must let you know before the deal closes.