When preparing an Offer to Purchase, how should contingencies be structured?

Structuring contingencies with short deadlines for inspections or approvals is effective because it creates a sense of urgency and encourages prompt action from all parties involved in the transaction. This approach helps ensure that potential issues are identified and resolved quickly, which can facilitate a smoother closing process. Setting short deadlines motivates buyers to conduct inspections and secure necessary approvals without unnecessary delays, allowing the parties to move forward efficiently.

On the other hand, having no deadlines can lead to prolonged negotiations or uncertainty, leaving both buyers and sellers in a state of limbo. Long deadlines for consideration might overwhelm buyers or create a lack of urgency, which could lead to complications in the transaction. Providing unlimited time for third-party approvals can also be problematic, as it might result in unnecessary delays or frustration, potentially jeopardizing the entire deal. Therefore, short deadlines for inspections or approvals strike a balance between thoroughness and efficiency, making them the preferred structure for contingencies in an Offer to Purchase.