June 29, 2015
As is explored here, the standard Cincinnati Area Board of Realtors contract launched late last year contains very substantial changes from prior forms published by the Board. This is important, because this new form of Contract is in use by most Realtors in the greater Cincinnati area, so buyers and sellers are more likely to encounter it than not.
Issues not explored in the prior blog entry, however, are the significant “outs” in the new form Contract for buyers. Historically, form residential contracts in use in greater Cincinnati would provide a standard inspection contingency and financing contingency, but otherwise, the buyer’s hands were tied in contract performance.
But under the new Board contract, the buyer has additional “outs” — the right to terminate the Contract — due to the failure of an appraisal contingency (paragraph 4) and for the non-approval of a variety of documents provided by the buyer relating to homeowners association covenants against the property (paragraph 8).
These provisions — especially the HOA covenant review — give the buyer broad rights to terminate the contract, leaving the seller to need to place the house back on the market, and find another buyer.