PURCHASE & SALES - CONTINGENCY & CLAUSE LIBRARY

**DISCLAIMER** - If you have any questions about how to protect your client/customer and do not find your answer here, PLEASE contact Dave Millett directly at 603-320-5265 or dave.millett@beangroup.com.

We will try and help with minor everyday circumstances, there may be times and issues that will require the use of an attorney.

When there is a need for additional language or protection for your client/customer, you should, whenever possible, use the forms available from your State Board of REALTORS®. 

A couple of these types of contingencies are:

• • Buyers need to sell a home before purchase (some agents call this a Kick-Out Clause)

  • Seller to find suitable housing

Below is a short list of Clauses that have been approved for use by Bean Group. You can use these clauses only if you use the entire clause, modifying where there are blanks to be completed. Please make sure your customer/client’s concerns are still covered if the opposite side of the transaction amends anything you add in a counteroffer situation.

SELLER TO MAKE REPAIRS PRIOR TO CLOSE:

The SELLER agrees to install, complete, repair, and or remedy _____________________ prior to the transfer of title, the cost of which will be borne by the SELLER and will not be reduced from the SELLING PRICE.

ATTORNEY OR ACCOUNTANT REVIEW OF P&S:

This Agreement is contingent on its acceptable review by an attorney or accountant for the ________________ (BUYER/SELLER/BOTH) within _____ days of the Effective Date.  Unless written notification of disapproval of this Agreement is provided within the time period set forth above, this contingency is waived.

CONDOMINIUM OR PARK APPROVAL:

This Agreement is contingent upon BUYER receiving written approval for occupancy from the ______________ (Condominium/Co-op/PUD/Park) board within ____ days of the Effective Date of this Agreement.  In the absence of such approval on or before date set forth above, this Agreement will be null and void and BUYER shall be entitled to the return of all deposits paid.

PROPERTY EXCLUDED FROM SALE:

It is understood that the following personal property will be removed prior to the PROPERTY being conveyed: __________

TRANSFER OF WARRANTIES:

Copies of the following limited warranties will be provided to BUYER on or before the transfer of title: ______

TIME IS OF THE ESSENCE:

TIME IS OF THE ESSENCE in all aspects of this Agreement.  Therefore all dates and deadlines included in this Agreement are firm and binding.

P&S TO REMAIN CONFIDENTIAL:

SELLER(S) agrees to keep the terms of this Agreement, including but not limited to BUYER'S name, in strict confidence until the time of recording.

APPRAISAL CONTINGENCY:

This Agreement is contingent upon BUYER receiving a written appraisal of the subject property at a price equal to or above the selling price within ____ days from the Effective Date of this Agreement. In the event BUYER does not receive such appraisal within the time period set forth above, the BUYER may either waive this contingency or declare this Agreement null and void and BUYER shall be entitled to the return of all deposits paid. The BUYER shall pursue the appraisal in good faith.  The appraisal shall be completed by a licensed appraiser and the cost of the appraisal report shall be borne by the BUYER.

OFFER EXPIRATION:

This offer shall expire unless written acceptance is delivered to BUYER or to _____________, on or before _________________ AM/PM ET, on ______________________, or until withdrawn by BUYER, whichever occurs first.

LEASES TRANSFERRING WITH PROPERTY:

The PROPERTY is subject to existing leases and/or rights of tenants in possession.  SELLER agrees to deliver to BUYER on or before _______________________, (i) true and complete copies of all existing leases, rental agreements, and outstanding tenant notices; (ii) a written statement by SELLER of all oral tenant agreements; (iii) a summary of tenant deposits; (iv) a summary of any uncured defaults by SELLER or tenants; and (v) a summary of any claims made by or against a tenant.  This Agreement is contingent upon BUYER's approval of said documents.  BUYER shall be deemed to have approved said documents unless written notice to the contrary is delivered to SELLER or SELLER's agents within ____ days of receipt of same.  If BUYER does not approve said documents and delivers written notice of rejection within the time period specified above, the Agreement shall be terminated and the BUYER shall be entitled to the return of all deposits paid.

SURVEY TO BE PERFORMED:

A survey of the property certified by a licensed surveyor will be provided to BUYER on or before the transfer of title.  If such survey discloses that any of the improvements on the PROPERTY encroach into the applicable setbacks or onto any adjoining property, or that improvements on any adjoining property encroach onto the PROPERTY, or that the PROPERTY materially differs from the description provided in this Agreement, then BUYER may terminate this Agreement and BUYER shall be entitled to the return of all deposits paid.  The cost for the above services will be paid by ____________.

NH CURRENT USE TAX CLAUSE:

The parties acknowledge that the PROPERTY is subject to current use taxation under the provisions of New Hampshire RSA 79-A, as amended.  Any and all taxes, costs, penalties, and other expenses associated with the change from such current use shall be paid by ________________.

INSURANCE CLAIM DISCLOSURE:

SELLER agrees to provide BUYER/BUYER'S Agency with insurance loss run report/clue number on the PROPERTY within _______days from Effective Date.

FSBO/ENTRY ONLY SELLER COMPENSATION LANGUAGE:

Buyer's obligation to buy is expressly conditional upon the Seller paying the Buyer Agent's Firm Bean Group, simultaneously with the closing of this transaction, a fee equal to XXX% of the final sales price. Said fee is the sole compensation received by the Buyer Agent's Firm.

SUBJECT TO ANOTHER SHOWING WITH ABSENT BUYER:

This contract is contingent upon Buyer(s) satisfactory showing on or before x/xx/xx. The results of this showing will be communicated to the Seller in writing within 2 days of the showing date. If Buyer finds the showing to be unsatisfactory, at their discretion, the Buyer may terminate the contract and all deposits will be returned to Buyer.

ESCALATION CLAUSE:

If the seller receives a competing offer where the net to Seller proceeds is greater than the net to Seller proceeds of this offer, then the Buyer’s offered Sales Price will automatically increase to an amount which generates a net to Seller equal to $X.00 in excess of the highest net proceeds generated in the competing offer(s). The Buyer’s escalated Sales Price shall not exceed $XXX,XXX.00. Seller to provide Buyer with written evidence of bona fide competing offer(s).

THIS CONTRACT IS NOT CONTINGENT ON AN APPRAISAL.  Purchaser shall proceed with this Contract at the stated Sales Price without regard to the Appraised Valuation of the Property.  In the event that the Appraisal reduces the amount of financing available from the Lender, Purchaser shall tender additional funds in cash at Settlement. 

BACK-UP CLAUSE:

1. Buyer and Seller acknowledge that Seller's right to sell the above-referenced property is already subject to the terms and conditions of a purchase and sale agreement which is still in effect (the “Prior Agreement”) and that this Agreement shall be a back-up agreement to the Prior Agreement. Seller's obligations under this Agreement are subject to the Prior Agreement becoming null and void. Seller closing on the sale of the property under the terms of the Prior Agreement shall terminate this Agreement and the earnest money deposit, if any, shall be returned to Buyer.

2. Seller shall notify Buyer by written notice in the event that the Prior Agreement becomes null and void which will eliminate the back-up nature of this Agreement and the date of notification shall be the Notification Date. Notwithstanding anything to the contrary in this Agreement, all time periods and deadlines for performance set forth in this Agreement, including the obligation to deliver any earnest money deposit, shall run from the Notification Date rather than the Effective Date.

3. At any time prior to the Notification Date, Buyer may terminate this Agreement by written notice to Seller. If Buyer elects to terminate, all rights and obligations of Buyer and Seller hereunder will terminate and the earnest money deposit, if any, shall be returned to Buyer.

4. Seller reserves the right to extend, amend or otherwise modify the terms and conditions of the Prior Agreement in Seller's sole discretion without notice to Buyer and without affecting the terms and conditions of this Agreement.

5. Buyer acknowledges that Buyer is in back-up position number {enter number here}. Seller agrees to process back-up agreements in the order they were accepted.