What is a Contingency?
When offering to buy a house there are times you want to make sure that your offer is dependent on something being proven true. You may want to ensure that the home is really in the good condition the seller says it is. We may include a home inspection contingency that essentially says, "we'll buy this house if it's in the condition you say it is. If we have it inspected and it's not, we reserve the right to walk away without losing anything."
Contingencies can come in all shapes and sizes. It's up to the buyer and seller to agree to the terms. Some common contingencies are:
Home sale - "If we aren't able to sell our current home by the time this home closes..."
Financing - "If we aren't able to obtain our loan to buy this home, for some reason...."
Appraisal - "If this home doesn't appraise for the agreed upon sale price..."
We have experienced several instances of both appraisal and inspection contingencies not being met. In most of these instances the seller was willing to go back to the negotiating table and either lower the sale price or make repairs that weren't previously known.
Contingency clauses in real estate can be a security blanket to keep you out of a bind. You don't have to walk away if the dependency isn't met, but you have the option and that's reassuring.
Contact Us if you’re ready to talk about buying or selling a home!