Newbie question about contracts.

[John Spina jr]

Hey everyone, I'm a newbe investor from New York. When getting a property under contract with the seller, what exactly has to be on the contract that will protect you and give you time to do your due deligence. Ive heard people say first get the property under contract then figure out what tool will work best.

[Ned Carey]

There are clauses called "Contingency" clauses. This means that you can back out of the contract if the contingency is not met. 

The two most common are a contingency for financing or for inspection. So if you are not able to get financing or an inspection does not meet your approval, you have the option of getting out of the contract, moving forward as is or renegotiating. 

It is important how contingencies are worded. You may have a limited time to exercise these rights, and there may be a limit to these rights. For example, if a thorough inspection finds spider webs in a closet, that would not likely be a legal reason to get out of the contract. 

Unless and until you learn about contracts you should use a board of realtors contract or a contract prepared by your attorney. It is important to understand what a contract says, as that is what you are obligated to.

There are contract in the FilePlace under the tools tab above. Many are not very well written but ready several may help you get more familiar with contract terms.