Common Home Buying Contingencies for Buyers to Be Aware Of
Whether you are buying a home or you are selling one, one of the things that you need to understand are contingencies. When it comes to buying or selling a piece of real estate, a contingency is a condition that needs to be met before a contract can be considered to be valid or final. A contingency needs to be agreed upon and signed off on by both parties when entering into the real estate contract. As a result, these should not be surprises. However, if you are not familiar with contingencies, finding out what some of the more common ones can help you better prepare for any during your home buying or selling adventure. These are just a few of the more common ones today.
Contingent on the Sale of Another Home
This is a very common contingency for home buyers to make if they are trying to sell their home at the same time, whether it's in an area like Carolina Forest or elsewhere. This is something that is done because they do not want to be left with two mortgages at the same time so they add a contingency to the contract that states that the purchase of their new home will not be considered final until the sale of their current home goes through closing.
This is usually a contingency that is in place to help protect the buyer of the property. This contingency focuses on the fact that the home must be valued at the asking price. If it does not, this is not usually a game changer in terms of how the contract is written. However, if the home appraises for lower than the asking price, then the price must be lowered and accepted by both parties before the contract can become official. However, the buyer or the seller can back out after an appraisal if the number is not what was expected and the two cannot come to an agreement on the official cost of the home for the transaction.
This is a contingency in place to help protect the seller. The last thing a seller wants to do is sell a home to a buyer only to find out that they do not have the money to buy the home and that they do not have the financing either. This is also a part of the contract that allows the buyer the time to get the financing for the purchase of the property. Most buyers do not purchase homes with all cash so this is a necessary clause to get the money gathered as well as prepared for the closing of the property. If the buyer does not come up with the cash or the financing by the time of the closing, the contract will be voided and the home will go back on the market.
This is a crucial part of the process so that both the buyer and the seller can confirm that there are no major issues with the home that were not disclosed from the beginning. If there are problems found with the home, the seller will have the chance to either make the fixes or lower the cost to allow room for repairs, If this does not happen, the buyer can back out from the contract.
There are a lot of different types of contingencies that can be added to real estate contracts and they are all designed to protect both buyers and sellers.