Appraisal Contingencies
Sometimes, the perfect home presents itself at an inopportune time. If you’re not prepared to buy but stumble into a great deal, it can be tempting to take owner financing or other non-traditional financing options in order to buy your dream home. Owner financing, lease options and mortgage assumptions all make tempting opportunities if traditional financing is beyond your reach. In other cases, it might just seem like a deal too good to be true, with no need to pursue traditional financing. If you’re considering an alternate financing deal, or if you’re a first-time homebuyer, you may want to consider adding an appraisal contingency to your contract. Continue reading “Appraisal Contingencies: Avoid Overpaying for Your Property” »
Backup Offers
Sometimes, the stars just don’t align properly for a deal and you may find yourself with a contract full of contingencies. Generally speaking, the more contingencies you have, the less attractive your deal will seem to a seller. If you find yourself with a weak deal and fear that the seller might reject you outright, consider adding a backup offer clause to the sale. The ability to accept backup offers can help to allay sellers’ concerns about accepting your offer, and give you an opportunity to get your proverbial ducks in a row in time to buy your new home. Continue reading “Use Backup Offers to Offset Contingencies” »
As Is Condition
Some older purchase and sale form contracts include an “as-is” clause, stating that the property is being sold “as-is.” The idea is to reduce seller liability for property issues. Today, most states have laws that protect buyers from “as-is” clauses, requiring sellers to disclose code violations and property defects to buyers. Still, if you see an “as-is” clause in the contract, strike it and require the sellers to list any applicable defects. The protection offered by state laws is a moot point if you get into a blame game with the sellers; it’s better to be clear up front about any issues, and refuse to give sellers a tacit approval to avoid liability. Continue reading “Beware of As-Is Condition” »
Risk of Damage To Property
When you sign a purchase and sale agreement, there’s always a risk of damage to the property after your contract date. Damage could come in the form of careless movers, abusive sellers or even natural disaster. To protect your interests, you should include a condition clause in the contract. Spell out the condition you want, and include a contingency to withdraw from the sale or postpone closing if the property isn’t in the desired condition. Including these clauses and contingencies gives you the ability to require the seller to remedy the problem, or withdraw from the deal entirely and get a refund of your earnest money. Continue reading “Risk of Damage to the Property” »
Time is of The Essence
Time is one of the most critical elements of a home deal. As a buyer, you want the sellers to complete their repairs and meet your terms as quickly as possible. At the same time, the sellers want you to clear your contingencies and finalize the deal as soon as possible. The longer a home deal drags out, the more uncertainty there is for both parties, and tempers can flare. You can protect your interests by writing timed deadlines into the contract, but failure to comply with these deadlines can constitute breach of contract and may nullify your home deal, or even subject you to penalties. Continue reading “Time is of the Essence” »
Other Contingencies
Besides financing and physical inspection contingencies, you may encounter many other types of contingencies during the home-buying process. Both you and the seller may want a certain degree of protection during a sale, and contingencies offer that protection. However, too many contingencies can make a deal seem unattractive to sellers, and make you seem like an untrustworthy buyer. Balance the temptation to ask for additional contingencies with the desire to move your deal forward, and refrain for asking for other contingencies unless you absolutely need them. Continue reading “Understanding Contingencies: Other Types of Contingencies” »
Physical Inspection Contingency
The physical inspection contingency is another extremely common contingency in home purchase contracts. You may decide you love the look of your new home, but a sensible buyer would insist on having it inspected to determine whether there are any hidden flaws. Unexpected problems could include electrical issues, plumbing problems, structural issues and other high-cost problems with your new home. The physical inspection contingency gives you a loophole if you find out that the home you want to buy has serious defects. However, the general language of this contingency is such that you could at least run into disagreements, and at most abuse the seller. Continue reading “Understanding Contingencies: The Physical Inspection Contingency” »
