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Protect yourself: Add contingencies to your purchase contract

The downside of making any large purchase is the fear that you aren't getting the deal you think you are getting, and this may be even more poignant if you are buying your first home. When it comes to buying the largest asset you may ever own, you probably want to protect yourself as much as possible.

Before you sign your purchase contract, you may want to make sure that you include contingencies that protect you and give you options should you encounter some obstacles during the due diligence phase of the process.

What types of contingencies should you consider?

Every home purchase is unique, but there are several aspects to the process that exist in most deals, which means you have several common contingencies to consider, such as the following:

  • A home inspection contingency in case the inspector finds something such as the roof, the HVAC system or something else that could require substantial and expensive repairs. You could then go back to the seller to negotiate the repairs.
  • A title search contingency allows you options if it turns out that there are defects in the chain of title to the property that could keep you from legally owning the property.
  • An appraisal contingency provides you with the ability to renegotiate the purchase price if the appraisal comes in lower than the sales price of the home, especially since your lender may not want to provide you financing as a result.
  • A mortgage loan contingency protects you in the event you cannot secure the financing you need to complete the purchase.
  • A wood-destroying pest contingency protects you from ending up with a home with termites or some other condition that will end up costing you in expensive repairs.
  • A roof inspection contingency provides you with options should it turn out the roof needs repairing.

These are just some of the contingencies you can put into your home purchase contract. In your case, other ones may be necessary, depending on your circumstances. If the property has a well, you may need a contingency for that. If you want to move in prior to the closing, you could request a contingency that allows you to do that. The seller may request some rent in exchange for agreeing to this request.

If you are unsure what types of contingencies you need in your purchase contract, you would probably benefit from seeking out the advice and assistance of a Georgia real estate attorney.

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