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Does a Buyer Have to Disclose Contingency to the Seller?

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Scenario:

You’ve found the right home and you want to buy it. However, you first need to close on the sale of your current house to afford the purchase of a new home. You’d rather not mention this contingency to the seller because you don’t want to hurt the offer. 

Question:

Should you disclose the contingency to the seller?

Answer:

Yes. If your inability to perform under a contract (i.e., close the transaction) is contingent upon the closing of another property, the contingency should me made part of the contract by using an addendum for sale of other property by buyer .

Otherwise, you are at risk of default under the contract if you fail to close because the sale of the other property doesn’t close.

Default by the buyer could result in loss of earnest money. It could also result in an action by the seller for specific performance or other remedies through the legal system, or both.

 

Have a buying or selling question? Call 301-768-2173 or xiomaracrespo@mris.com

Source: Copyright National Association of Realtors. Reprinted with permission.

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