What contingencies should I consider when buying a home?

On Behalf of | May 10, 2021 | Real Estate & Development

In a seller’s market, you have to be very careful with any offer you make on a home. Sellers have their pick of buyers, so you need to stand out in a good way and minimize the negative. 

Contingencies are a normal part of real estate contracts, but in a seller’s market, you want to limit the contingencies you include. NerdWallet explains that if you load your contract with contingencies, sellers will probably not even consider your offer. However, you should still protect yourself by including some important ones. 

Inspection

You should always get an inspection of any home you wish to buy. An inspection will uncover issues that could be costly and make you decide not to buy the home. It protects you and allows you to know what you are really getting. 

Inspections do add time to the process, though. They also can result in no sale of the home if there is a huge issue, which can be discouraging to sellers. However, you should never leave this contingency out. It could cost you a lot in the end if you forego the inspection just to get the seller to accept your offer. 

Mortgage

Unless you know you have financing or the ability to pay cash, you need a mortgage contingency in your contract. This simply states that your offer is dependent on your approval for financing. If you cannot secure financing, it voids the contract and allows you to back out without issues. 

Other

There are some other contingencies that you may have to have to protect yourself. For example, if you must sell your current home prior to buying a new home, you may need something in your contract that gives you time to sell your home and remain under contract on the new one. 

The biggest thing about contingencies is that in a seller’s market, you should only include them if they are necessary to protect yourself and ensure fairness in the deal.