Often in a competitive situation, a seller’s market, a real estate agent might advise you to forgo contingencies as a way of improving your chances of getting the house. What are real estate contingencies? You may encounter some clauses when buying or selling a home that allow an out to back away from the purchase. It would be best to thoroughly understand the contingencies listed below before signing a purchase and sale agreement.
Often called a due diligence contingency, it will give the buyer rights to have the house inspected. In extreme seller’s real estate markets, it is not uncommon for buyers to waive a home inspection as a way of sweetening their offer.
The inspection contingency is contingent on a satisfactory house inspection report. The purchaser will need to be sure that there are no significant expenditures required immediately, like a new roof. A new roof requirement might cause the buyer to terminate the contract or alternately ask the seller to pay for it.
“If the property appraises below the contract value, the lender will only underwrite the loan for the financing percentage the buyer specified. If the buyer were putting 20 percent down, the lender would only finance 80 percent of the appraised amount, not 80 percent of the contract price.” If the appraisal is too low, the buyer must put up more money or walk away.
“This is risky to waive only from the aspect that the financing approval is ultimately up to the lender.” If the buyer has chosen a lender that knows the neighborhood and does everything right, this is the least risky.
You may employ an offer way above the asking price but contingent on immediate acceptance. Some offer Buyers offer a rent back option after the sale to the seller, or the seller may ask for a rent-back option as a contingency, so they have time to find another house or time to move. One potential buyer even wondered if there was a ghost. The house sale was contingent on either there is a ghost or no ghost.
The Washington Post describes a buyer who made an offer on a condo in Washington’s Columbia Heights contingent on an evaluation by a feng shui specialist to determine whether the home had the right energy. However, the buyer waived the standard home inspection. The sellers agreed, and the feng shui specialist gave the green light to the transaction.
Real estate purchase and sale agreements are legal contracts. You must understand the details when buying and selling. Not only are large amounts of money involved, but there is often an emotional investment as well. Contingency clauses are there to protect you, whether you are buying or selling.
When you buy your house, the contract may say contingent on quite a few things. It is essential to work with an excellent buyer’s agent who will carefully craft appropriate contingencies inserted into the contract.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577.