Contract contingencies and conditions
The contingency clause that is most likely to appear in an offer contract is the financing contingency. Because it is so common it is written into the standard contract form, leaving the buyer only to fill in the appropriate gaps.
This contingency is intended to give the buyer the opportunity to recover his deposit if he is unable to procure acceptable financing for the purchase. It should not be used as an 'excuse' to drop out of the purchase for any other reason. The seller is entitled to request documentary evidence that the buyer has tried and failed to get a mortgage within the specified time period.
A second contingency, which is written into the 'small print' is the home inspection contingency. It is usual for the buyer to be allowed a specified period after the contract is signed by all parties to have a home inspection carried out. This contingency can include mold and wood destroying organism (WDO) inspections. The default inspection period is 15 days, but a shorter or longer period can be specified depending on circumstances.
Up to the end of the inspection contingency period, the buyer can decide whether or not to continue with the contract on the basis of the inspector's report and the seller's response to it. Depending on the age and features of the home, related inspection contingencies may include septic system, well water and lead. If the buyer chooses not to continue with an as-is contract after inspection, the initial deposit will be returned to the buyer.
Other contingencies that may be written in to the contract can include an appraisal contingency, where the contract can be negated if the home does not appraise up to the price offered in the contract, and, for property with significant land (not usually for a home in a subdivision) a survey contingency.
There are a couple of contingencies that are more likely to apply in the case of someone purchasing a rental home. The buyer may add a contingency that the contract is conditional on receipt and inspection of advance rental bookings if these convey with the property.
An overseas or out of state buyer may want to make an offer on a home that he hasn't seen. If so, he may write in a contingency that the offer is conditional on his travelling to Florida to view the property within a stated period of time.
A seller may put in a contingency that the offer is conditional on him selling another property first. This is not popular with sellers, and is used only rarely.
Every contingency can be accepted or rejected by the seller at the time the offer is considered. Contingencies are part of the 'offer package', and they can be re-negotiated by the seller in a counter-offer.
If you are not accustomed to buying property in Florida, you should always take the advice of your real estate agent or attorney in adding contingencies and in wording them in an appropriate way.
Note: time periods in the contract are usually expressed in relation to the effective date of the contract. This is the date on which the last signature (buyer's or seller's) is applied to the contract.