6 Home Buyer Contingencies to Buddy Up With
Buying a home is rarely an easy, casual experience you can breeze through without any hiccups along the way. Some sellers are not always totally honest, while others do not know their property as well as they should. Maybe you want an attorney to review all the paperwork or perhaps you can only finalize the deal if your current home sells. There are a number of scenarios that may apply to you and with them come reasons why home buyers’ contingencies could become your best friend.
- Appraisal Contingency – When a professional appraiser evaluates the home, they should find that it appraises at, or above, the negotiated price. They will take measurements and photos and provide a report. If the appraisal is lower, this clause lets you get out of the deal, or you may choose to simply re-negotiate, if you have your heart sent on the home.
- Mortgage Contingency – This contingency actually protects the buyer and seller. As a buyer, the clause gets you out of the deal if you can’t secure financing. As a seller, it defines a timeframe that the buyer has to secure financing. If it is not done in time it allows the seller to proceed with another buyer.
- Repair Contingency – If you are worried that the home may need costly repairs, a repair contingency should set your mind at ease. Many properties are sold as-is and don’t have this option. This is especially true with home obtained at auctions.
- Home Sale Contingency – If you need the equity in your current home to use as a down payment on the house you are interested in buying this clause will make the sale contingent on these terms.
- Partner Approval Contingency – So, you have found a property you love, but several other people are interested, too. Your partner is out of town, so do you risk missing out on the home or make an offer? Thanks to this contingency, you can make an offer contingent on their approval.
- Additional Testing Contingency – This contingency gives you the chance to have the home tested for mold, radon, and other toxic substances. You may want to have it tested for termites, as well.
There are a number of little (and large) bumps that can surface during a home purchase. As a home buyer, it is in your best interest to research and familiarize yourself with contingencies available. The bottom line is that contingencies can protect you from being locked into a home that you literally just want to run away from.