Does a buyer have to disclose his contingency to the seller?
10/15/2014 | Author: Editorial Staff
My buyer client needs to close on the sale of his current home to afford the purchase of a new home. He doesn’t want to mention this contingency to a seller because he thinks it will hurt his offer. Should he disclose his contingency to the seller?
Yes. If your buyer client’s ability to perform under a contract (i.e., close the transaction) is contingent upon the closing of another property, the contingency should me made part of the contract by using the Addendum for Sale of Other Property by Buyer. Otherwise, the buyer is at risk of default under the contract if he fails to close because the sale of the other property doesn’t close. Default by the buyer could result loss of earnest money. It could also result in an action by the seller for specific performance or other remedies through the legal system, or both.
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