How to Approach an Offer With a Contingency

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    If you’re selling a home, you can almost always expect to receive an offer with some sort of contingency. I’ll go over a few common contingencies and explain why it’s important you know what each one means for your home sale.

    First, it’s likely you’ll see a mortgage contingency. Unless it’s a cash offer, an offer will be presented with financing from a VA loan, an FHA loan, or a conventional loan. There will be certain stipulations that need to be met in order for that loan to go through and complete the sale.

    Usually, that means both the buyer’s credit and the home’s appraisal meeting the requirements of the loan. In order to protect yourself from any delays, make sure the buyer includes a pre-approval letter that reassures you of their financial readiness to purchase your home.

    Second, a standard contingency you’ll see is a home inspection contingency. The buyer will hire a home inspector to make sure everything is in working order. This includes the plumbing, electrical work, etc. This contingency allows the buyer to back out of the sale if something is found during the home inspection that you and the buyer can’t negotiate on. Similarly, if your home is located on the water, there will be an inspection of the docks and pilings.

     

    Make sure you fully understand why the buyer has included a contingency and how it will affect your timeline and overall sale.

     

    The last most common contingency is a home sale contingency. This will be included in the offer of a buyer who needs to sell their home before they can purchase yours. If a home sale contingency is part of an offer, you need to make sure your agent finds out if the buyer’s home is actively listed on the market or under contract. Your agent should also find out if the home is priced to sell or positioned to sit on the market for awhile.

    Offers with contingencies are not bad. In fact, most will have them. Just make sure you fully understand why the buyer has included a contingency and how it will affect your timeline and overall sale.

    If you have any questions about contingencies or if you have any other real estate questions you’d like me to answer, please don’t hesitate to give me a call or send me an email. I’m always happy to help!

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