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Draft a Real Estate Contingency Agreement for a buyer and seller
Real Estate Contingency Agreement
Table of Contents
Introduction
Definitions
Contingency Clauses
Financing Contingency
Inspection Contingency
Appraisal Contingency
Sale of Buyer’s Property Contingency
Obligations of the Parties
Termination of Agreement
Dispute Resolution
Governing Law
Signatures
1. Introduction
This Real Estate Contingency Agreement (hereinafter referred to as the "Agreement") is made and entered into on [Date], by and between:
Seller: [Seller's Full Name], residing at [Seller's Address], (hereinafter referred to as the "Seller").
Buyer: [Buyer's Full Name], residing at [Buyer's Address], (hereinafter referred to as the "Buyer").
The Seller and Buyer may collectively be referred to as the "Parties" and individually as a "Party."
2. Definitions
For the purposes of this Agreement, the following terms shall have the meanings ascribed to them below:
Property: The real estate property located at [Property Address], including all improvements, fixtures, and appurtenances.
Purchase Price: The total amount agreed upon by the Parties for the sale of the Property, which is [Amount in KES].
Contingency: A condition that must be met for the Agreement to become binding and enforceable.
3. Contingency Clauses
3.1 Financing Contingency
The Buyer’s obligation to purchase the Property is contingent upon obtaining financing. The Buyer shall apply for a mortgage loan in the amount of [Loan Amount] within [Number] days from the date of this Agreement. If the Buyer is unable to obtain financing within [Number] days, the Buyer may terminate this Agreement by providing written notice to the Seller, and any deposit made by the Buyer shall be refunded.
3.2 Inspection Contingency
The Buyer’s obligation to purchase the Property is contingent upon a satisfactory inspection of the Property. The Buyer shall have the right to conduct a professional inspection within [Number] days from the date of this Agreement. If the inspection reveals any material defects, the Buyer may request the Seller to make necessary repairs or may terminate this Agreement by providing written notice to the Seller, and any deposit made by the Buyer shall be refunded.
3.3 Appraisal Contingency
The Buyer’s obligation to purchase the Property is contingent upon the Property appraising for at least the Purchase Price. The Buyer shall have the right to obtain an appraisal within [Number] days from the date of this Agreement. If the appraisal is less than the Purchase Price, the Buyer may terminate this Agreement by providing written notice to the Seller, and any deposit made by the Buyer shall be refunded.
3.4 Sale of Buyer’s Property Contingency
The Buyer’s obligation to purchase the Property is contingent upon the sale of the Buyer’s current property located at [Buyer’s Property Address]. The Buyer shall have [Number] days from the date of this Agreement to sell their current property. If the Buyer is unable to sell their property within this period, the Buyer may terminate this Agreement by providing written notice to the Seller, and any deposit made by the Buyer shall be refunded.
4. Obligations of the Parties
Seller’s Obligations:
The Seller shall provide access to the Property for inspections and appraisals.
The Seller shall make any agreed-upon repairs resulting from the inspection.
The Seller shall provide all necessary documentation for the sale of the Property.
Buyer’s Obligations:
The Buyer shall apply for financing and make a good faith effort to obtain a mortgage loan.
The Buyer shall conduct inspections and appraisals within the specified timeframes.
The Buyer shall provide written notice to the Seller of any contingencies that are not met.
5. Termination of Agreement
This Agreement may be terminated by either Party if any of the contingencies are not met within the specified timeframes. Upon termination, any deposit made by the Buyer shall be refunded, and neither Party shall have any further obligations under this Agreement.
6. Dispute Resolution
Any disputes arising out of or in connection with this Agreement shall be resolved through mediation. If mediation fails, the dispute shall be resolved through arbitration in accordance with the laws of Kenya.
7. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of Kenya.
8. Signatures
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
Seller:
[Seller's Full Name]
[Date]
Buyer:
[Buyer's Full Name]
[Date]
TLDR
This Real Estate Contingency Agreement outlines the conditions under which a property sale will proceed, including financing, inspection, appraisal, and the sale of the buyer's current property. If any of these conditions are not met, the agreement can be terminated, and any deposit will be refunded.
Conclusion
This Agreement provides a structured approach to ensure that both the Buyer and Seller are protected during the real estate transaction. It outlines specific contingencies that must be met for the sale to proceed, thereby offering a clear path for both parties to follow.
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