We all know storms are as unpredictable here in North Texas as a Cowboys football season. Tornadoes, hail, even the occasional earthquake can happen at a moments notice. So what happens if something happens to the house you’re buying before you close on it? Enter the Casualty Loss paragraph of the contract.
What does this mean in layman terms? Basically, if the house you’re buying is damaged or destroyed by fire before you close on it, you’re not obligated to still buy it if the home is not restored to its previous condition before the closing date. Now if it’s not restored due to a situation beyond the sellers control (such as insurance companies falling behind during a tornado outbreak, fire destroying the property, etc.), the buyer has a few options. They have right to terminate and get a full refund of their earnest money, extend performance date for seller to fulfill obligations by 15 days (and closing as necessary), or even close on the home in its current condition if the sellers insurance company will allow it with the insurance proceeds to be assigned to the buyer for restoration. It’s rare for this clause to ever come into effect, but there wouldn’t be a specific paragraph about this if it didn’t happen to someone at some point in time.
Obviously it sucks if the home you have under contract is ever damaged and unable to be bought when the contract says, but at least you can rest assured you’re protected and steps can be taken under contract law.
So if you’re in the market to buy a home, Contact Me Today! I can help you get set up with mortgage and insurance people to make sure you’re able to buy a home and have the best coverage.
You can also get a copy of my Home Buyers Handbook when buying to learn about the process!