I was recently talking with a first time buyer about the assorted contingencies that she’ll have to fall back on if she puts in an offer on a property. For those of you not accustomed to real estate lingo, contingencies can be thought of as “escape routes” – they’re reasons you can use to get out of your purchase contract. If you’re working off of a standard Chicago area housing contract to purchase a condo, you’ll usually be able to use the following reasons to get out of your purchase contract:
- Inspection contingency (Major problems with the property found by a licensed home inspector)
- Lawyer review contingency (Problems in the purchase contract language)
- Home sale contingency (If you have to sell your current home first before you can buy a new one)
- Loan contingency (No loan, no property.)
- Condo association contingency (Problems with the bylaws or financial status of the condo association.)
I mentioned that buyers often do not see the bylaws, financial statements and meeting minutes of a condo association until just a few days before closing.
“Isn’t that really late in the game to be finding out that kind of information?” she asked. “Shouldn’t you know the financial health of the association before you make an offer?”