The Issue Of Contingent Liability

902 WordsMar 7, 20164 Pages
Contingent Liability is a condition that refers to the possibility of a future event happening and addresses the responsibility of the party liable should the event take place. In today’s real estate market both sellers and buyers may have contingencies stated in the terms and conditions for selling and purchasing a home. The most common contingent liability are guarantees to debt. In real estate the status refers to a home currently on the market with a purchase agreement or contract in place with contingencies. The contract allows for adequate time to respond to the contingent liability so the home can continue closing. For a seller contingent liability may have some major impacts when selling a home, meaning the seller is responsible for the incurred potential cost if the home is found to exist below an agreed standard or condition. The most critical contingency is based on the property being sold may be the final results of a home inspection or financial appraisal for the property. There are others like the title report and disclosures associated to the sale of a home. If any of these conditions are not acceptable to buyer and the potential lenders, contingent liability allows a buyer to back out of the sales transaction. Seller Contingency Sellers may also have the ability to back out buying a new home if certain conditions are not met for selling their existing home. For example; the seller is selling the existing home to be able to purchase a new home. The
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