Today we delve into Sale and Close contingency (Paragraph 16A). Sale and Close contingency means that your buyer wants to make an offer on a house contingent on receiving a contract for her house and then closing on that contract.
While under a Sale and Close contingency the seller may continue to market the property and accept any other contract offer as the primary contract as long as the contract is not also a Sale and Close contingency contract. The seller may even accept a contract for less money as primary as long as the contract is not a Sale and Close contingent contract. Any other Sale and Close offers, even for more money, would be taken only as a back-up contract. If the seller accepts a new primary contract, the original Sale and Close contingency can become a back-up contract if both parties agree. If the parties cannot agree, then the contract is void.
If the buyer fails to clear the Sale and Close contingency prior to the closing date set forth in the contract, the contingency fails and the contract is void. Earnest money would be due back to the buyer because the contingency could not be satisfied.
In order to remove this contingency the buyer must accept a contract on her property with all contingencies removed and she must have completed any due diligence period on the property she is selling. Once this is done, she MUST immediately notify her seller that the contingency has been met and she is moving to a Close contingency. At that point she has all the protections of Paragraph 16A which includes no other contracts being able to trump hers. It is imperative that notification is made immediately because the seller may accept another primary contract until receiving notice that the contingency has been satisfied. Make sure you have written verification the seller has received the buyer’s notice of the contingency satisfaction that changes the contract to a Close contingency.
* The Contract referred to in this Item is the Central Carolina Realtors Association contract that is widely used in the Midlands of South Carolina.
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