Provisions and contingencies are part of the formal offer and protect both the buyer's and seller's interests in case any unforeseen problems or delays arise between the time an offer is accepted and the mortgage is closed. Provisions and contingencies may be inserted by either the buyer or the seller.

Addendums are often added by the buyer's and/or seller's attorney to cover more specific issues not covered by the standard Purchase and Sale Agreement (e.g., condo fees, parking spaces).

Common Provisions and Contingencies

Mortgage Contingency

This important contingency states that your ability to purchase the house is dependent on your ability to obtain financing by an agreed upon deadline. If your financing does not go through, you will not lose your deposit as long as this contingency is included.

The Mortgage Contingency Addendum

Allows the buyer to withdraw the purchase contract within an agreed upon period of time if he or she is unable to obtain a mortgage loan at "prevailing rates, terms and conditions." This contingency defines the buyer's obligations with an objectively clear standard that avoids the need for litigation over the buyer's failure to accept nontraditional financing.

Inspection Contingency

States that any defects in the home uncovered during a home inspection must be either repaired or compensated for monetarily. If you are not satisfied with the resolution of issues that arise from the home inspection, you may cancel the contract.

Inspection Contingency Addendum

Allows the buyer, at his/her expense, to conduct a home inspection to examine the property for "serious structural, mechanical or other defects." If any are found and would cost more than an agreed amount to repair, the buyer may withdraw the purchase contract. The buyer must supply the seller with a copy of the inspection report if they exercise this contingency.

The following are some other standard contingency addendums that fall under inspection:

Inspection Contingency Addendum (with Radon)

Allows the buyer, at his/her expense, to inspect for the presence of dangerous levels of radon gas in the property as well as "serious structural, mechanical or other defects." If any are found and would cost more than the agreed upon amount to repair, the buyer may withdraw the purchase contract. The buyer must supply the seller with a copy of the inspection report if they exercise this contingency.

Inspection/Mortgage/Pest Contingency Addendum

Allows the buyer to withdraw the purchase agreement due to a negative home inspection, the presence of termites or other wood boring insects, or failure to get a mortgage loan at "prevailing rates, terms and conditions."

Inspection/Mortgage/Pest Contingency Addendum (with Radon)

Allows the buyer to withdraw the purchase agreement because of a negative home inspection—including excessive levels of radon gas—the presence of termites or other wood boring insects, or failure to get a mortgage loan at "prevailing rates, terms and conditions."

Pest Contingency Addendum

Allows the buyer, at his/her expense, to inspect for the presence of termites or other wood boring insects, and to withdraw the purchase contract within a specified period of time if such pests are discovered. The buyer must supply the seller with a copy of the inspection report if they exercise this contingency.

Lead Paint Contingency Addendum (P&S)

Allows the potential buyer to have the property inspected, at his/her expense, for the presence of lead-based plasters and paints, and to withdraw the purchase contract if any signs of lead are found.

Sewage Disposal System Contingency Addendum (P&S)

Requires the seller to arrange and pay for an inspection of the on-site septic system by a certified Title V inspector. The seller must provide certification that the septic system is not a threat to the public health or safety, as defined by Title V. If no such certification is provided, the buyer may revoke the purchase contract.