Special Provisions in the Contract!

Special provisions in the contract allow you to write in conditions or provisions you may want the seller to adhere to in order for you to accept the terms of the overall contract. Listed below is language typical of what I usually include in the special provisions section.

• Contract is voidable unless executed by_____ (a specific date and time, i.e. November 29, 2008 at 5:00 p.m.). 

“Voidable” means it’s the buyer’s discretion whether or not to void the contract if it goes past the date stated. The buyer has the choice. This also places a deadline on the seller so the seller doesn’t hold on to your offer and entertain others that might come in.

• Buyer retains right to restructure financing as long as there are no delays in closing or additional costs to seller. 

We think this special provision is important because, during the financing process, you never know when you may have to restructure your financing. You don’t want the seller to be so rigid that he or she won’t work with you. If a change in the original financing terms negatively affects how much the seller has to pay, the seller may use one of these options:

• Consider the borrower in default of the contract term, or 
• Return the earnest money if the borrower is unable to secure financing based on the original contract, or
• Add the difference in the form of additional buyer closing costs

Here’s another.

• If property fails to appraise for sales price, contract will terminate and earnest money will be refunded to buyer.