Mortgage Contingencies in Real Estate Contracts

By Steven R. Shanin, Attorney at Law
© 2007 Complete Books Publishing, Inc.

Most buyers finance their home purchases, even those who write cash offers. Sometimes a deal without a mortgage contingency will be referred to as a "cash" deal even though the buyer is going to get a mortgage. That's because from the seller's point of view, the buyer is obligated to go through with the deal even if he is not able to get a mortgage. (This is where a preapproval from a quality mortgage lender and earnest money are important.)

NOTE: A cash offer may look great on paper, but make sure the buyer actually has the money or the mortgage before you get to the closing table.

A mortgage or financing contingency gives the buyer a certain number of days in which to obtain a commitment from a mortgage company, for a stated amount, for stated interest, and for a stated term of years.

continued at: Mortgage Contingencies