What is a Subject when Buying a House?

A Subject Condition or contingency is a provision that is included in the purchase contract for a house that allows the buyer to back out of the deal under certain circumstances. Subjects are often used to protect the buyer in case certain conditions are not met, such as the completion of a home inspection or the approval of a mortgage. For example, a common contingency is a "subject to financing" contingency, which allows the buyer to back out of the contract if they are unable to obtain a mortgage for the property.

Contingencies can also be used to protect the seller, such as by requiring the buyer to sell their current property before closing on the new property. This option is minimally used and not that attractive to a Buyer who's willing to pay top market price. It's important to carefully review the Subject Conditions and Terms in the Purchase Contract to understand your rights and obligations before entering into a Contract of Purchase and Sale Agreement. Please seek independent legal advice.

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