It means an offer on a home has been made and the seller has accepted it, but the finalized sale is contingent upon certain criteria that have to be met. These criteria, or contingencies, typically fall under three major categories: appraisal, home inspection and mortgage approval.
When it comes to home buying, there are several items and factors to consider. Some may be noticeable and others not so much. In layman terms and as it relates to real estate, a contingency is a condition that must be met in order for the deal to be finalized. These things are identified and are made requirements to complete the sale.
Here we share some common contingencies that a purchaser should look to include in their offer-
A home inspection contingency is one of the most common and with a good reason. This allows for home buyers to safely have a way out if they are not happy or uncomfortable with the inspection.
A mortgage financing contingency is another common type you may want to consider. Many home buyers rely on mortgage loans to cover the costs of their purchase, or a large portion of it. If your mortgage falls through, you will be protected.
Be careful when it comes to making contingencies. Only include the ones you feel are a must, as this could make it easy for you to back out of a deal legally if things shouldn’t go as planned. But it can also make your offer less appealing to a seller which can be an issue in a hot market.
Overall, contingencies are smart to include in purchase offers.
Let the Houlihan & O’Malley team help you purchase your next home!