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Buyer Tips
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If
you feel less than certain that you will be able to go through with
the purchase for any reason, you can - and should - go one step
further. Insist on adding an 'escape clause' to your offer. This
allows you to back out of an agreement without incurring any penalty
or disadvantage. This clause should be already in the 'Offer and
Acceptance' form supplied by your attorney or buyer's broker. If it
isn't, ask him how to add it.
Such a clause might state that you will go through with the deal, but
only if certain other things happen. For example, you'll complete the
purchase provided your partner or mortgage lender or attorney approves
it. Remember, this offer document is not the full Sales and Purchase
Agreement. That will be drawn up later by your attorney or broker (or
approved by him) if your offer is accepted. And, it will spell out in
detail the conditions attaching to the purchase.
The escape clause (often called a 'contingency' or 'contingency
clause') in the Offer and Acceptance document serves only one purpose,
to allow you the right to withdraw without any cost or further
obligation to you. This is a matter you should cover in your
preliminary talk with your attorney or buyer's broker. At the
same time, seek advice on how to go about putting a deposit on the
home you select. And keep in mind that an offer to purchase can be
withdrawn at any time prior to acceptance, with or without an escape
clause .
When it comes to handing over money, my own approach is one of
caution. Even when protected by an escape clause, I believe it's wise
to give the agent the smallest possible deposit (sometimes called an
earnest money deposit' or a 'good faith' deposit). This is the money
the agent looks for before he submits your offer. If you decide later
to pull out of a deal, a properly worded contingency clause can
guarantee you will get your money back. Without such a clause, you
could forfeit your entire deposit.
This Homebuyers Tip was excerpted from:
Not One Dollar More!, by Joseph Eamon Cummins, Kells Media Group,
1995.
ISBN# 0963821598
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