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In this nascent world of restrictive credit standards, anyone buying a new home needs to expect the expected.
When it comes not only to getting mortgage approval but also to getting promised funds, buyers can count on roadblocks that could delay or even prevent settlement.
That is why it is essential for their attorneys to include appropriate financing contingency clauses in the contracts. Those clauses allow buyers to have their deposits returned in the event that lenders don’t finally provide the money to close.
Considering that the usual deposit of 10 percent of the purchase price — $40,000 on just the $400,000 purchase of a studio apartment — is a substantial sum, contingency clauses are not to be taken lightly.
Notes Forest Hills lawyer Ryan J. Walsh, whose explanation I’ll paraphrase liberally below, there are three major contingencies that can protect a buyer: (more…)