Buying a house is a dance of negotiations, offers, and counteroffers. As a buyer, you want your offer to stand out among all other potential offers. There are several tactics buyers often employ to make their offer more attractive. One such tactic is waiving certain contingencies.
Contingencies allow you to back out of an offer on certain conditions. They’re there to protect you in case things aren’t as they seem or when certain events occur. While waiving some contingencies can be a strategic move to ensure your offer will be taken, there are other contingencies you really don’t want to remove. The following 4 are the most important contingencies to keep when buying a home.
The appraisal contingency is the most important one, if for no other reason, because it could potentially save you a lot of money. Once a seller accepts your offer, your lender will order an appraisal. A problem arises, however, when the appraisal comes back lower than your offer price. With an appraisal contingency, you can place certain conditions on the offer in terms of the appraisal. You can stipulate that the appraisal must come within a certain percentage of the sale price. This will allow you to back out of the offer if you feel you’re overpaying.
The inspection contingency protects you against unseen structural and other issues in the home. It allows you to have a licensed inspector to check the property once you sign the purchase agreement. After the inspection, you can negotiate with the seller concerning repairs you want them to make. If no agreement is reached, you can back out of the offer without losing any money.
This contingency is important if you’re needing to sell your current home in order to buy the new one. If you’re current home doesn’t sell in the specified time, you can back out of the offer on the new one. While this is crucial when you need the equity in your current home to purchase a new one, it may drive some sellers away.
What happens when you make an offer on a house, but the financing falls through? A financing contingency ensures you will get your earnest money back in the case that you can’t get the home loan. You typically will have a certain amount of time to obtain a mortgage, often as many as 14 days. If the financing falls through, you are no longer obligated to buy the house.
You want to make sure you’ll get the best price possible for your new home. While waiving some contingencies may give you the edge you need in some cases, those contingencies are there for a reason. They’re for your protection. Make sure these 4 must-have contingencies for your real estate contract are non-negotiable.
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We worked with Amy Lippincott's team when selling our house in Bridgeland and when buying our new Bridgeland house. The personalized service they provide their clients is unequaled and they are unquestionably the best realtor team in Cypress.
The Lippincott Team is the best around!! I recommend them to everyone I know looking to lease, buy or sell. I have used them on every house I have bought and sold.
Best Realtor in Cypress! Amy walked our family through every step of purchasing our new home with professionalism and experience. Team Lippincott made us feel as though we were their #1 priority! If you are looking to buy or sell real estate in Northwest Houston, I highly recommend Team Lippincott! Simply THE best!
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The Lippincott Team was awesome to work with! They were thorough, patient with my many questions & responded quickly. I knew I was in great hands & loved working with them!