In a perfect world, home sales would proceed without any contingencies. That is to say, buyers would come in with rock-solid financing and find homes that are in good condition. Similarly, sellers would be happy to receive offers that reflect the true market value of their property.
But in reality, real estate deals are a complex and sometimes difficult process. It can be frustrating, stressful and even scary if things don’t go the way you planned. For these reasons, many buyers choose to include a number of contingencies in their purchase offers.
A financing contingency is one of the most popular contingencies in residential real estate. This type of contingency gives buyers time to secure a mortgage or other form of financing. It also ensures that if they can’t secure the financing, they can back out of the deal and get their earnest money refunded.
Another common type of contingency is an appraisal contingency. This is often included by lenders because they want to make sure that they’re not lending more than a home is worth. They’re also concerned that buyers might not be able to afford repairs on the home after they buy it, which can lead to financial difficulties in the future. For more info https://www.homebuyingguys.com/richardson-texas/
An inspection contingency is a common one as well. It allows a buyer to have the property inspected before closing on the deal. This is especially helpful if a buyer has been considering buying the home for some time.
While this contingency is very common, it can be troublesome if buyers decide they’re not sure about the home after they receive the inspection report. This is why some buyers might opt to waive this contingency as a way of getting their offer accepted.
If a buyer’s offer has an inspection contingency, the seller must provide them with an acceptable inspection report before they can close on the sale. This can put a strain on the relationship between both parties.
Some other common types of contingencies are home sale, settlement and mortgage contingencies. These are all incredibly important in ensuring that the sale of a home goes smoothly.
A home sale contingency is an extremely important aspect of a real estate contract. This type of contingency is especially valuable for buyers, because they can back out of the deal if the home doesn’t sell within a certain period.
This type of contingency also helps to prevent a domino effect from occurring in the real estate chain. This can happen if several different buyers’ offers are all contingent on each other’s current homes selling.
The domino effect can be a dangerous one for both parties, as it can lead to many stalled or delayed home sales in the long run.
It’s important to remember that while contingencies offer valuable protection for both buyers and sellers, they should not be used too liberally. They can clutter a contract and can potentially cause an imbalance in the market, leading to less competitive offers.