Contracts
What is a 'contingency' in a Nevada purchase agreement and name three common types?
AA contingency is a penalty clause; common types include late fees, cancellation fees, and inspection fees
BA contingency is a condition that must be satisfied for the contract to become binding or proceed to closing; common types in Nevada include financing contingency, inspection contingency, and appraisal contingency✓ Correct
CA contingency is the earnest money amount; common types are 1%, 2%, and 3%
DA contingency is a seller's reservation of rights; types include right to cancel, right to rent back, and right to retain fixtures
Explanation
Contingencies protect buyers (and sometimes sellers) by making the contract conditional on certain events. The three most common Nevada contingencies are: (1) Financing contingency — buyer must obtain mortgage approval; (2) Inspection contingency — buyer may inspect the property and negotiate repairs or cancel; (3) Appraisal contingency — property must appraise at or above the purchase price. If a contingency is not satisfied, the buyer can typically cancel and recover their earnest money.
Related Nevada Contracts Questions
- Under Nevada law, what is the legal effect of a minor (under 18) signing a real estate purchase agreement?
- What is the purpose of an earnest money deposit in a Nevada real estate transaction?
- What is an 'inspection contingency' in a Nevada real estate purchase contract?
- What is a 'for the purchase price' clause in a Nevada deed of trust?
- What is the Statute of Frauds requirement for real estate contracts in Nevada?
- What is a backup offer in a Nevada real estate transaction?
- A contingency in a real estate contract is best described as:
- In Nevada, a purchase agreement becomes binding when:
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