Types of contingency clauses in the real estate contracts

A contingency clause defines a condition that has to be met in future to execute the contract. If it is not happened the contract will be canceled, if happened the contract will be remain in force to execute. The contingency should be accepted by both the parties that is, the buyer and the seller of the real estate property. These can be written for any concern and need. The following are the most commonly used contingencies in the real estate buying contracts.

• Appraisal contingency: If the buyer is taking the loan, needs appraisal. Sometimes the buyer may get low appraisal than expected. In these cases the appraisal contingency will be helpful. The contingency used to write for a certain amount as minimum appraisal amount. If the buyer does not get that amount, the contract will be terminated. The earnest money from the buyer refunded in many cases. If the buyer interested to buy the property, will have the chance to purchase the property within a specific days after the appraisal notice issued. Alternatively, the seller is ready to give for the appraisal amount; the closing process will be started.

• Mortgage contingency: The mortgage or the financing contingency will give the time to the buyer to get the finance to purchase. While writing the contract, in this contingency some number of days specified for the buyer to obtain finance. If the buyer cannot obtain finance from the lender during this period, the contract will be terminated, or the time can extend if the seller agreed. The buyer can claim his or her earnest money if the financing is unable to secure.

• Due diligence: The due diligence or the inspection contingency provides the right to have home inspected to the buyer. It should be within a specific time, usually five to seven days. Therefore, the buyer can appoint a home inspector for inspection. Based on the inspection report, buyer can take the purchase decision. If there are any issues found in the inspection, can disapprove or negotiate for the repairs.

• House sale contingency: If the buyer has a home and he or she needs to sell that one to settle the amount for the new one, this clause is used. In this clause, specific time is allowed to the buyer to sell the existing house. If not sold, the buyer can withdraw from the process without any legal consequences. In these cases, the seller can add the kick out clause in the contract, which allows him to continue market the house to others. If he found a new buyer, seller give specific time to remove the contingency. If the existing buyer is not keep the contract alive, the seller can sell to the new buyer.

While writing a contingency, be cautious with the time factor, because it plays a key role to get the things done. Otherwise you may lose both money and time. An experienced real estate agent can guide you properly along this process.

Importance of Title Search

When the ownership of a piece of property changes from a seller to a buyer, the moneylender or the bank must request for a title search. If there are any defects in the title of the property, the title search will reveal them. The title search is designed to protect all the stakeholders involved in the property transaction process. These include the buyer, the mortgage holder, and the bank. It is initiated by the money lending organizations and mandatory.

The main base for the title insurance is to get from the searching for public records. This process usually includes visits to the clerks of the courts, registers of deeds or the offices of records and other officials. In the title search, the title search services companies look in the records or special taxes and levies, street and sewer system assessments, judgments, mortgages and several other matters.

In many jurisdictions, the information about liens against property and information about a piece of property may be filed in different manners. They can be filed by the street address, or by lot number, or under the owner's name or with the seller's name. So, it becomes more cumbersome process. To reduce the burden of title search process, many title services companies have created its own title plants. The title plants contain virtual data and information. It is same as the county records. The title companies, however, make it indexed in a consistent matter like lot number and name. With this title plants, the title searches can perform more accurately and quickly. In most of the major metropolitan areas the title can be searched by the companies and issue the title insurance within twenty four to forty eight hours.

In the early stages of land transfer, title services companies involvement is a good idea. This is because they can solve some property related disputes. For example, the buyer bought a two acres of land. That land was part of five acre tract at once before and it has a deed. In this prior deed to the five acres, the property usage is restricted to the usual out buildings and a single family dwelling. In the original tract of the other three acres already have a single family dwelling. Then there is a question as to whether the new two acres purchaser could build a home in his land. With the assistance from the title services company, from the appropriate parties concern releases were obtained to remove the problem. Then allowed to house to built.

Once a while the title problems may become very serious and it is not proceed with the transaction in most prudent course. For instance, a buyer was about to the close his purchase when title search revealed flood, utility, pipeline and the road easements across property. It would have severely limited his use of the property. The buyer declined to continue with transaction when these findings became known. These problems are uncovered only by the title search.

Homebuyers Luckier Than Renters

The real estate market, which was doing fine even in the previous year by this time, has collapsed. With the fall in this industry, many homebuyers could get their dream homes at affordable rates.

But the condition of the renters was bad before real estate boom and even after that. The rental prices has surged bringing the affordability of renting an apartment to go farther.

The nation’s minimum wage of $6.55 could not get a person even a one-bedroom apartment for hire. According to National Low Income Housing Coalition’s survey, median hourly wage of an American renter is $14.69. But the amount he needs to earn to cover his monthly rent of an average $928 per two-bedroom apartment is $17.84 an hour.

Thus, he is short of more than $3 per hour to pay his rent.

In the case of an expensive metropolitan like Stamford or Santa Cruz, the renter must earn at least $31 per hour.

New Rent Control Law For Filipino Families

Philippines rent control law expired with the arrival of New Year itself. With this law, owners were checked against uncontrolled hikes in the rental prices, thus giving protection to low-income tenants and boarders.

With its expiration, people have fallen again under the trouble of uncontrolled rents. At first, the house of Philippines didn’t seem to have any plans on extending the law, but now the House Speaker itself assured the swift passage of the bill to extend the rent control law. According to the announcement made by the House Speaker Prospero C. Nograles, the new rent control law will be effective for 3 years - until 2011.

The rent control law was first made into existence in the year 1999. Since then, it was extended twice, in 2002 and 2005. The new extension will be the third one, which is intended to support people with low incomes as well as people with insufficient funds to buy a own house.