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Product Full Details

9 Contingency Categories for Buying Income Properties (22 Pages)

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Many problems experienced in acquisition of and even ownership of a particular rental property could probably have been reduced, maybe even avoided altogether if adequate contingencies had been included in the purchase offer. It is very important that the right contingencies be included in the purchase contract. It is equally important that they be properly written.

Adequate contingencies allow a way out with, hopefully, return of your earnest money deposit if it turns out that the property is not worth what you offered to pay for it. Alternatively, contingencies may provide an opportunity to negotiate a lower price than you originally offered. It is recommended that you include contingencies to cover every issue that is a material issue regarding your decision to purchase a property.

It is important to provide adequate timelines for performance of due diligence. The commencement of each contingency period, the length of each period, what constitutes notice of passing or failing, and other issues must all be clearly defined. Things that must be taken into account when setting up timelines include vendor availability and scheduling, report analysis and decision-making times, and even holidays and potential weather conditions.

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