Don't Let These Three Clauses Confuse You - The Source

When buying a home here in Oregon, there are several agreements, addendums and the like that are required to complete the purchase and sale of a particular property. The centerpiece of every transaction is the Purchase and Sale Agreement, a document designed to protect both parties and ensure a smooth closing. Yet, over the years, I’ve noticed three specific clauses that often cause confusion. Let’s demystify them together so you can approach your next real estate transaction with confidence.

First up, let’s talk about the “As-Is” Addendum. This is one of the most misunderstood parts of the agreement. Many buyers hear “as-is” and immediately think “no inspections” or “the seller won’t fix a single thing.” This couldn’t be further from the truth! An “as-is” sale simply means the seller is not obligated to make repairs. It doesn’t waive your right to a professional home inspection. In fact, an inspection is even more critical in an “as-is” transaction. It’s your opportunity to fully understand the home’s condition. You’ll still have the right to negotiate with the seller based on what the inspection reveals, or even to walk away from the deal if the findings are too significant for your comfort level. The “as-is” addendum just sets the expectation upfront that the seller isn’t planning to fix things, but it doesn’t leave you in the dark.

The second frequently misunderstood clause is the “Contingency” section. Contingencies are your safety net. The most common ones are the inspection contingency and the financing contingency. The inspection contingency, as we just discussed, allows you to have the home professionally inspected and gives you a window to negotiate or terminate the agreement based on the findings. The financing contingency is just as vital. It states that your ability to purchase the home is dependent on you securing a loan. If, for some reason, your financing falls through after a good-faith effort on your part, this clause protects your earnest money deposit and allows you to cancel the contract. Without these contingencies, you could find yourself legally bound to buy a house you can’t get a loan for or one with a host of unexpected issues. They are not obstacles; they are safeguards.

Finally, let’s clear up the confusion around “Earnest Money.” This is a good-faith deposit you provide when you make an offer. It shows the seller you’re serious about buying their home. People often mistakenly believe this money is a separate fee for the agent or a non-refundable down payment. Instead, earnest money is held in a neutral escrow account and is typically applied toward your down payment and closing costs at the time of closing. The only time you might risk losing it is if you violate the terms of the contract without a valid reason, such as backing out of the deal after all your contingencies have been satisfied. As long as you follow the contract, your earnest money is safe.

Navigating a real estate agreement can feel overwhelming, but by understanding these three key areas the “As-Is” Addendum, your essential contingencies, and the purpose of earnest money you’ll be well-equipped to make informed decisions. As always, if you need some assistance with buying or selling a property here in Central Oregon, please contact me at jkeane29@gmail.com, thanks!

This article appears in the Source September 18, 2025.