property condition addendum or clause

property condition addendum or clause

A clause in a real estate purchase contract permitting the buyer to cancel the contract without penalty or loss of the earnest money if an inspection reveals defects. Wise sellers will insert a basket clause, specifying that minimal defects, such as those that would cost no more than $500 to repair,may not be grounds for cancellation and that anything estimated to cost between $501 and $2,000 (or wherever the seller's comfort level is) may be repaired by the seller within a reasonable time and the contract may not be cancelled.