There are two choices on the Buyer Contingency Addendum. If the buyer needs to sell a house before they can purchase a house use the first contingency lines 7-41. This purchase will be contingent on the buyers getting an offer on their current home or property. Put a date that the buyers feel they will get an offer by and a closing date. This is just pure speculation because they do not have an offer yet. If the buyer receives an offer on their home, they must give it to the seller of the home they are purchasing within 3 days or whatever they have put on line 13. If they do not, the seller may give them a cure notice. If there is a breach the seller can keep the earnest money. The seller has 3 days to look over the offer on the buyer’s home and if he does not accept it, the buyer will receive a return of their earnest money. If the seller does not cancel, the contract will become contingent on the buyer’s home closing. If this offer on the buyer’s home cancels for any reason, the buyer has 3 days to either immediately cancel or proceed with the contract and remove the contingency and proceed with the closing. The buyer must prove that he can close escrow without selling the first home. If the seller accepts a backup offer on their home prior to the buyer getting an offer on the relinquished home, the seller will give this first buyer 3 day to remove their contingency. If they remove the contingency, they must have written proof that they can close escrow without selling the first home. If not, this offer will be cancelled, and the seller is free to move forward with the second backup offer. On the top of page 2 you have time periods. They go with the 1st contingency lines 42-48. The first says that you begin all time periods when this contingent offer is accepted. That means that you pay for home, termite, and any other inspections right away. If you are kicked out with a backup offer before your 1st home is under contract, your will lose all that money. The 2nd choice is to start your inspection 3 days after you have an accepted offer on the first home. If you chose this one, the buyer would not have lost money on inspections and inspections begin only after you have an offer on the 1st home.
The 2nd contingency is if you already have an accepted offer on the home the buyer needs to sell. Lines 49-66. There is no kick out clause on this one. You already know the date for closing because you already have a contract on the first house. If the contract falls through on the home the buyer is selling, the buyer can immediately cancel or continue by removing the contingency of their home selling and prove that they can afford both houses and close. Lines 67-79 will be used on either contingency. You will submit the offer of the 1st home with any additional info or documentation that you have that proves that home is likely to close so that you can proceed with the purchase of the 2nd home. If the buyer fails to deliver any documents in this addendum, the seller can issue a cure period notice and after 3 days can keep the buyer’s earnest money. Be very careful to follow timelines on this addendum.