If inspection turns up anything negative whatsoever. You can also use clauses that give you even less risk. One
such clause is the “and/or assigns” clause, or the “spouse’s approval” clause.
This type of clause is much more lenient, and allows you to walk away regardless of
the condition of the property. Using buyer protection clauses will ensure that
you’re able to stay out of financial ruin if something doesn’t go how you thought
it would or planned it out. Always stay safe by using them.
~ [PDF] PROTECTION CLAUSES
Protection clauses are something we need to talk about more in-depth, so you
know what options you have when writing your contracts. Keep these in mind,
and use the ones that are specific to your situation so that you can keep yourself
out of trouble.
Assignment Clause – This one is a catch-all clause that allows you to write
an offer, and back out if your partner doesn’t agree to the purchase for any
reason. Obviously, it should be used if you are looking at a property
without your partner present. When I say “partner”, I am talking about
your buying partner.
Many investors have partners that have an equal say in whether or not you
buy a property. If you don’t have a partner (or another buyer lined up),
then this clause will not work for you. In addition to allowing you to back
out of a deal, this assignment clause also allow you to assign the contract
to another buyer. You can do a “bird-dog” this way, or make a quick
finder’s fee from the deal.
Earnest Money Clause – This is used so that your liquid cash won’t be tied
up on a deal that may or may not be accepted or closed. Take for example
that you allow a $100 earnest money deposit which will increase to a
couple thousand if the offer is accepted, or when all contingencies are
If something comes up in the inspection using this clause…