Closing Contingencies Standard Language in Real Estate Contracts

Daily Herald (Arlington Heights, IL), February 11, 2007 | Go to article overview
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Closing Contingencies Standard Language in Real Estate Contracts


Byline: Tom Resnick

Q. My husband and I found a house we like and want to sign a contract to buy it. We recently signed a contract to sell our existing home.

We cannot purchase the new home if we don't sell our existing home. We want to protect ourselves in case something goes wrong with our sale. We asked someone about a sale contingency but we were told that because we already sold our home, that would not apply.

Do we just have to take a chance and hope our buyers go through with the deal?

A. If you look at paragraph 31 of the 11-page standard form contract most commonly used in our area, you will note two separate contingencies.

Paragraph 31(B)(1) makes the contract contingent on the purchaser entering into a contract to sell their current property on or before a certain date.

Paragraph 31(B)(2) makes the contract contingent on the purchaser closing on their current property on or before a certain date.

In your situation, you would make your purchase contingent upon your closing on your present residence on or before the date you are obligated to purchase the new property. In the event your sale is delayed for any reason, you may request an extension of the home close contingency from your seller.

Most other form contracts contain similar optional language. In the event your form contract does not contain such language, it may be either written on the existing form contract as part of your offer or can be addressed by your attorney during the attorney review period, usually five business days after the date of acceptance.

Q. My husband and I were divorced about two years ago. Part of our agreement was that me and my children could remain in our house until our youngest child graduates high school, about two years from now. My ex-husband is responsible for making the mortgage and real estate tax payments. When my youngest graduates high school, I must either refinance and get him off the mortgage or sell the house.

Yesterday, a sheriff appeared at my front door and handed me a Summons and a Complaint for Foreclosure.

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Closing Contingencies Standard Language in Real Estate Contracts
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