Night of the Living Dead was my first horror movie. I was in the eighth grade; the movie was playing at Morse High School. Weeks, okay months, after watching the movie I was haunted by scenes from this classic, black and white gruesome tale of terror.
When watching Night of the Living Dead, or any other scary movie, there’s always a scene when you want to scream a warning to the innocent victims. You know you could change their destiny, and avoid a lot of blood and gore.
In real estate, the contingency phase is this pivotal scene. In this case, unlike horror films, buyers are encouraged to investigate the weird sounds, go into the dark basement and look in the stuffy attic. During this “scene” buyers have the opportunity to investigate and educate themselves about the home.
This investigation period begins on the effective date, the date when the buyers and sellers agree to the terms of the Purchase and Sale Agreement, and must be completed within a specified number of business days.
Stress for buyers and sellers may unfold during this period as test results on the home are unveiled. In all, there are 25+ possible investigations the buyer may elect to undertake. A few examples include: mold, lead paint, radon in air and water, code enforcement, survey, flood plain and septic. Added drama and dark misery lurk if any of the tests return unsatisfactory.
In the face of unsatisfactory inspections, the buyer may void the contract, attempt to renegotiate, seek remedies to resolve the issue, or do nothing and continue on as is. As with all horror movies, some monsters, or results, are scarier than others. Realtors and the appropriate professionals can help inform the buyers as to which results are more manageable than others.
If the investigations are not completed and resolved within the contracted time frame, the deal reaches the bewitching hour. If both the buyer and the seller agree, an extension of the due diligence period may be granted. However, if the clock strikes 5:01 p.m. on the last day of the contingency phase and the buyer decides to walk, the time is up; the seller may keep the earnest money deposit.
As easy as it would be for the victims in a horror movie to avoid their demise, buyers and sellers can breeze through the contingency phase to a successful closing. Be a savvy buyer or seller, work closely with a Realtor who will know and monitor the effective date and deadlines. Remember you’re safe until the investigative phase expires; after that the monsters come out.