If you are in the market to buy a new home, there are a variety of aspects to plan for before you have the keys and can move in. When it comes to making an offer to a seller, there are standard contingencies, which you can include as the buyer. In essence, a contingency covers the possibilities of big “What Ifs.” What if there is a big change in the value of the home I want to buy? What if there is serious damage to the property? What if my financing doesn’t come through as expected? These “What Ifs” can be cushioned by the right contingencies, and keep your earnest money in your pocket if an offer goes awry.
An Appraisal Contingency ensures a buyer doesn’t over pay for a property. With this stipulation, an appraiser is brought in to review and report on the fair market value of a home. Should the value come back significantly lower than the listed price, the buyer can walk away from the offer. Having an appraisal will also come in handy when it comes to your financing, as lenders often use these reports to establish loan amounts.
Home Inspection Contingencies provide buyers with the ability to back away from an offer if there are serious structural or integral issues with a property. If a home inspection reveals problems, a contingency keeps the negotiation table open. Sellers can agree to fix a problem, but may raise the asking price to recoup some of the cost. If an agreeable solution is not found, this type of contingency lets you stop the process and keep your money.
If financing is still in progress at the time you make an offer, including a Mortgage Contingency will ensure both parties enter into a sale that can be funded. With this type of stipulation, a buyer is given a specific time frame to procure their mortgage for the home. There are any number of reasons a loan can be delayed. If funding is not available by the end of the time period, you can walk away from the offer and keep your earnest money.
Before you make an offer, review these common contingencies in detail with your Realtor®. When you are ready to sell or buy your home, we at Springs LifeStyles Real Estate are here to help you with all of your real estate needs! As your buyer agent, we will strive to give you the best support we can. Call Kathy Stenberg at (719) 963-4867, or you can email her at firstname.lastname@example.org. You can also visit us at our website for available listings and additional information.