types of contingent offers

Real Estate Defined: Types of Contingent Offers

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Before we explore the various types of contingent offers, let’s clarify what a contingency is. A contingency, or contingent offer, means specific conditions must be met before the sale proceeds. Otherwise, the contract is void and the seller can consider other offers.

Home inspection contingency

A home inspection contingency helps protect the buyer if the home inspection uncovers certain issues, allowing the buyer to back out.

A home inspector will assess the home’s condition, looking at all aspects, including unnoticeable details and things buyers might not consider. If the inspection reveals major flaws in the home’s interior or exterior specified in the contract, the buyer can back out or request repairs or a lower purchase price.

Mortgage contingency

Giving the buyer a specific period to secure home financing is known as a mortgage contingency. Typically, this contingency is done early in the process, but you will want to ensure you have been pre-approved for a mortgage.

Appraisal contingency 

An appraisal contingency happens most often when you are taking out a mortgage. This is because lenders require an appraisal, which is a third-party assessment of what the home is worth.

Even if both buyer and seller agree on a sales price, your lender can’t offer you a mortgage for more than the home’s appraisal. But, hope for a sale isn’t lost. Buyers can put down a larger down payment if they have the money so they won’t need a loan for more than the house is worth, for example.

Title contingency

Next up on types of contingent offers is a title contingency. This means the buyer’s offer is contingent upon the home having a “clean title” free of liens or obstacles.

If there are any claims against the title, it can make a purchase risky for buyers. But luckily, a title search can reveal these issues before closing. However, even if concerns are addressed, title insurance protects against future claims.

Home sale contingency

One of the most common contingencies is a home sale contingency. This contingency means that the sale of the home you’re looking to buy will only go through if your current home sells first.

Although it is possible to move forward with buying a new house before your current home sells, a lender may be able to help you with a bridge loan or suggest another financial strategy. Or you can try to request a later closing date—this will rely on the seller’s agreement.

Summary

Now that you know more about the types of contingent offers and what to expect, connect with a trusted REALTOR to learn more. Check out our Lee County Association of REALTORS members to find a good fit.

For more news and information, continue reading our blogs.

an overview of seller concessions

Real Estate Defined: An Overview of Seller Concessions

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Buying a home is a big deal. Selling a home is a big deal. There are a lot of moving parts and factors to consider on both sides, including the cost. But costs can quickly go beyond a list price. Let’s look at an overview of seller concessions as an example.

What are seller concessions?

The best way to begin an overview of seller concessions is to explain what seller concessions are exactly. To simplify, seller concessions can sweeten the deal and could help expedite the selling process.

More specifically, seller concessions cover specific costs associated with buying a house that the seller agrees to pay. Seller concessions could include certain home improvements or repairs as well as some of the closing costs.

For instance, seller concessions may include several different fees such as the inspection fees, appraisal fees and the attorney fees.

Even though seller concessions can help lower the upfront costs and attract buyers, there are pros and cons for both buyers and sellers.

Seller concessions for buyers and sellers

For buyers, the upside to seller concessions is it can save you a significant amount at the closing table, making a home more affordable. This can also allow potential buyers the chance to make a higher offer, which may have a better chance of standing out in a competitive market.

From the seller’s perspective, seller concessions may speed up the sale of your property by making it more attractive to buyers in a crowded market.

Summary

Now that you’ve read an overview of seller concessions and what they could mean for you as a buyer or seller, reach out to your local Realtor to discuss your next move within our market. You can also learn more about our local market, real estate trends and other industry news by reading our blogs!

home inspections and what to expect

Real Estate Defined: Home Inspections and What to Expect

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When purchasing a home, a home inspection can save you thousands of dollars in unexpected repairs. It’s important to know exactly what you are getting into. Let’s take a closer look at home inspections and what to expect.

What is a home inspection?

A home inspection is a visual assessment of a home’s physical condition and mechanical systems, including the roof, ceilings, walls, floors, windows, doors, plumbing and more.

An inspector helps make sure there are no hidden issues in a house before the buyer commits. It is important to know about home inspections and what to expect in order to do your due diligence before purchasing a home.

In addition to the home’s physical condition and mechanical systems, inspectors will also check major appliances and the heating and air.

What happens during a home inspection?

During a home inspection, the inspector has three main tasks.

  1. Identify any possible issues with the house.
  2. Suggest fixes.
  3. Write a report, including photos, noting all observed concerns.

This report is vital for the buyer and agent. Based on this report, a buyer can request repairs from the seller.

Things to look out for that home inspectors won’t check

While inspectors assist in determining physical and mechanical issues, they typically only address issues that can be seen with the naked eye.

Inspectors will not put themselves in danger. For example, if a roof is too steep, they will not climb up to check for missing shingles. Instead, they’ll try and use binoculars.

Basic home inspections do not include any of the following:

  • Swimming pools
  • Wells
  • Septic systems
  • Structural engineering work
  • Fireplaces or chimneys

For wood-burning fireplaces, many inspectors will open and close the dampers to make sure they’re working and look up chimneys for obstructions, but that is all.

Summary

Now that you know about home inspections and what to expect, make sure you show up with your agent on the day of the inspection. This allows you to ask questions, review the inspection report and prepare to negotiate repairs.

For more industry insights, continue reading our blogs.