A supplemental agreement to a real estate purchase contract, often necessary when a buyer needs to sell their existing property to finance the new purchase, establishes the terms and conditions related to this contingency. For instance, it might stipulate that the purchase of the new property is contingent upon the successful sale and closing of the buyer’s current home within a specified timeframe. This agreement outlines the obligations and responsibilities of both the buyer and seller regarding the sale of the buyer’s existing property.
Such agreements provide clarity and protection for all parties involved. They safeguard the buyer from financial strain should their existing property not sell within the required timeframe, allowing them to withdraw from the new purchase agreement without penalty. Conversely, they offer the seller assurance that the buyer is actively working towards fulfilling their financial obligations. Historically, these contingencies have become more prevalent during periods of market uncertainty, reflecting buyers’ caution and desire to avoid owning two properties simultaneously. They represent a valuable tool for navigating complex real estate transactions and balancing the needs of both buyers and sellers.
