Home Inspection
Most offers today contain a contingency on a home inspection. Besides financing, this is probably the most common contingency. It does make sense since you would certainly want to make sure the home you’re purchasing is in decent enough condition. Depending on how the home inspection is written, a buyer can get out of the contract if the home inspector finds “anything” wrong with the property, or items that need to be repaired are negotiated. It’s important to remember that there are dates in the home inspection addendum that need to be met by both parties, or other consequences occur.
Financing
Unless the offer to purchase the home is for cash, financing is always a contingency. Just because you have a “pre-approval,” from a bank, that isn’t a guarantee of a loan. In today’s market, a financing “commitment” to a loan usually takes close to a month after the contract is ratified. Many transactions fall through in this market because financing wasn’t acquired, for whatever reason.
Appraisal
We still do see appraisal contingencies today, even though fewer than in past years. This one is pretty simple. The house must appraise for X (usually the purchase price). If it doesn’t, the buyer has remedies, including, asking the seller to lower the purchase price. A well written appraisal contingency can be very valuable in an offer, especially for houses that aren’t in a cookie cutter development.
Radon, Mold, Fireplace, Septic, Water…
These are all contingencies, or should be, when making an offer on a house. If you don’t ask to perform the test, than you’re waiving your right, and that may not be in your best interest.
If you would like to discuss contract contingencies in more detail, please give me a call at your convenience at 443-995-9595.
