In today’s hot real estate market, things can move very quickly. Whether you’re a buyer or a seller, you can soon find yourself in over your head. And that’s where contingencies come in.
Here’s everything you need to know about contingencies in real estate.
What Is a Contingency In Real Estate?
A contingent offer states that certain conditions must be met in order to complete a home purchase. If these conditions are not met, the contract is then null and void.
Common Real Estate Contingencies
Here are a few of the most common types of real estate contingencies that you might consider including in a deal as a buyer or seller.
Mortgage Contingency
This contingency gives the buyer a window of time to apply for and obtain financing to purchase the home. If for any reason they’re not able to secure a mortgage at that time, they can withdraw their offer without penalty.
Title Contingency
This stipulates that the home must have a clean title, protecting buyers from the risks of purchasing a home with title encumbrances.
Home Inspection Contingency
This gives the buyer the right to get a home inspection before the sale becomes final. They then have the right to negotiate for repairs or to back out of the deal completely.
Home Sale Contingency
This protects buyers who need the cash from the sale of their current home in order to afford buying a new one.
Appraisal Contingency
This allows the sale to be terminated if the home does not appraise for a specific, minimum amount.
A Word of Caution
By including contingencies in a real estate deal, buyers are taking a risk that their offer will be less appealing than other offers which come without such contingencies. In a seller’s market, this can be harmful.
Want to know more about contingencies in real estate? Contact the team of realtors at D Realty. We can advise you as to whether including these common contingencies is right for you.