Some call them escape plans, others call them “weasel clauses”. Contin
gencies are conditions which must be met if a contract is to be performed.
Contingencies that suspend the contract until certain events occur are known as suspensive conditions.
Contingencies that cancel the contract if a certain event occurs are known as resolutive conditions.
Most contracts of sale contain contingencies of some kind or another because few people can afford to enter into a real estate purchase without them, but it is possible for a real estate contract not to have any contingencies. It is possible, and I can tell you that I have written contracts with no contingencies.
I’ll give you an example. Right now I’ve got a piece of property. The people that owned it live over at New Jersey. Nice bungalow, about 2300 square feet, good part of town. List price was $130,000.
I went up there and looked at the property and I said, “Yeah, okay. This is a pretty good-looking piece of property.” I wrote an o er for $60,000. Asking price: 130. I offered 60.
In my $60,000 o er, it was subject to inspection, subject to partner approval, and subject to third party private money investor. Those are the 3 conditions that I want you guys to remember: subject to inspection, subject to partner approval, subject to third party private money financing.
If you guys are going to utilize Cogo as your funding source, we are your third party financing solution. Your partner is you, your spouse, or your business partner. If you write a bad deal and you write it subject to partner approval and you want to get out of that deal, call me up and I will be your partner. I will say, “Hey, Mr. and Mrs. Seller or Mr. and Mrs. Agent, my partner wants out of the deal. I don’t approve. We’re out.” You get your earnest money back. You walk away. No damages, no liability.
To Your Success;
Lee A. Arnold
CEO
The Lee Arnold System of Real Estate Investing
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