What Contingencies Are In My Purchase Offer – When writing an offer, there are certain contingencies you should be aware of. Contingency is essentially a word for “a way of qualifying your obligation to fulfill a contract”. Purchase offers have contingencies built in that need to addressed before closing on your new home. So what contingencies are typically included in an offer?
A financing contingency is important and can clarify the financial implications moving forward. This will help to make the sale about you, as the buyer, and will help you to secure an acceptable loan or other type of financing that you are using to purchase the home.
Depending on the location of your new home, you might want to consider an insurance contingency. This will help to protect you in the event of a natural disaster like earthquake or flood. You have the ability to make contingent on receiving an insurance commitment from an insurance agent in writing.
Appraisal contingencies can work in favor of the buyer or the seller at any given time. If the buyer can’t get an appraisal that is at least the sellers asking price, the buyer has the ability to walk out of the agreed upon deal. On the other hand, if the buyer is unable to get an appropriate appraisal, they can ask the seller for a lower purchase price. If the seller then refuses, they have to ability to back out of the deal.
As a buyer you have the ability to include contingencies in your home offer, so the same goes for the seller. The seller has the ability to put contingencies on the sale of their home to you. For example, they can make the sale of their home to you contingent upon whether or not they’re able to find a new home to move into in the given time period.
Before you purchase the home you can have the home inspected by a professional. If all looks good and the home passes an inspection you can sign off to remove the contingency. If a few issues pop up in the home inspection you may be able to submit a request to remedy to the seller. A request to remedy allosw you to make some of the repairs a part of the purchase contract and negotiate for the seller to help you remedy certain issues with the home. Although not always necessary, it is an option.
Before writing an offer on a home, make sure you know what contingencies are built into the contract your signing so you know your timeline, if you want to add any, or if you want to waive any. If you have any questions, please don’t hesitate to contact me!