Contingencies (Subjects) are commonplace in contracts of all kinds. A subject allows for one party or another to legally back out of a contract on the event of some specific condition occurring. They are protection against the unknown. In real estate, there can be subjects inserted for either a buyer, seller or both. These take many different forms and until removed in writing, either party may change their mind.
Homebuyers subjects could be:
- Home Inspection – the condition of the hone
- Code Violations – an investigation into improvements made without permits
- Final Loan Approval – the loan is ready for signature and close
- Speciality Inspections – mold, geological, septic, well
- Insurance at a reasonable rate
Sellers can also have their own subjects, such as one which states the sale is contingent on seller finding a new home.