In our prior blog post, we shared ideas to help your purchase offer stand out in a competitive market. In addition to those suggestions, there is a school of thought that says your contingencies should be kept to a minimum.
But scaling back the conditions that protect you should not be done lightly – if at all. A purchase offer is a legal contract. Contingencies allow you to exit the deal without penalty if certain stipulations are not met. If you do not have any contingencies, you will have no legal excuse for failing to go through with the home purchase.
Here are common purchase contingencies – and why they’re important to Columbus home buyers!
Contingencies That Protect Home Buyers
Financing contingencies say that your offer is subject to your ability to obtain a mortgage at terms favorable to you. You can specify the type of mortgage, the down payment amount and the interest rate. Even if you are pre-approved, and there is wide variances as to what that is and what it really means from lender to lender, it’s a good idea to have this contingency in case your lender finds some wrinkle at the last minute, and your loan is in jeopardy.
Appraisal contingencies go hand-in-hand with financing. Your mortgage lender will require an appraisal in order to verify that the home has sufficient collateral value to cover the mortgage. If the appraisal falls short of the sale price, your contingency allows you to nix the deal. Without it, you could be expected to make a larger down payment in order to keep the deal intact – whether or not you have the ability to do so.
Home inspection contingencies allow you to have a home inspector look for defectsor hidden issues that could cost big dollars to remedy. While sellers are supposed to disclose known defects, there can be issues with a home that the seller may legitimately not recognize or be aware of. This contingency allows you to sniff around for potential problems. It gives you the ability to exit the deal, or re-negotiate, if any concerns are discovered.
These are just a few examples. You can add specialized contingencies to a purchase offer, such as the deal being subject to the approval of your attorney, or subject to the property being suitable to your mother-in-law. We will provide guidance concerning the type of contingencies you should consider.
Columbus Home Buying Help is Available!
As your Exclusive Buyer’s Brokerage we share free information to help our Columbus home buyers! We also have a network of trustworthy industry professionals to help you, including home inspectors and mortgage lenders.
You are also welcome to download our free e-book for more home buying tips and strategies!
If you are buying a home in Columbus, be sure to have professional representation on your side! Our services are free of charge to you, and we will be happy to explain how this works. Contact us for expert home buying guidance!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
www.BuyersHome.com
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