A Contingency is basically your “out” clause.  They are placed in the purchase agreement at the allowing of your home builder.  If you have a current home that needs to be sold, and you have decided to build a new home, many times a Contingency can be placed in the agreement to prevent you from ending up with two house payments.

Basically, Contingencies work like this:

     • Current Home Not Sold
     • Sign Agreement to Build a New Home with a Home Builder
     • You have until about the Sheetrock Stage of the New Home to either:
          o  Option 1: Sell your current home
          o  Option 2: Opt out of the new purchase agreement and have your Earnest Money Returned
          o  Option 3:  Forfeit your Earnest Money and continue building the new home in hopes that either your existing home will sell or you can lease it.

Many times Contingencies can also be written for other items.  For instance, you decide to build a floor plan that is either a new company design, new product line, or is just not available for viewing.  Ask the Sale Consultant if you may do a Sheetrock Contingency if you are unable to understand how the finished home will look.

Contingencies like this are at the discretion of the Home Builder, it is not an industry standard to do this, but it may be an option.