5 Common Contract Contingencies

by Kim Ellis, REALTOR 08/11/2019

Contingency in real estate means an agreement of sale that must take place to continue the transaction. There are numbers of options that buyers can include in their contracts. Below are five common home offer contingencies to consider:

Inspection contingencies

Inspections are of great benefit in the process of buying a home. They enable the buyer to know the exact condition of the property. Most home buyers know inspections cover the general examination of all the systems of the home as well as checking the interior and the exterior. Apart from that, there are other inspections like checking for damages from wood-destroying insects. The inspection contingency comes into play once all the necessary checking is complete.

Financing contingencies 

Financing contingency is essential if you are buying your apartment through a mortgage. Financing contingency gives you the opportunity and time to apply for home purchase financing. The financing contingency states that if you are unable to secure a loan for the purchase of your home, you are eligible to look for other alternative means or you back out from the sale. 

Appraisal contingency 

Appraisal contingency and financial contingency work hand in hand. One of the requirements for granting a loan by most mortgage companies is a satisfactory appraisal. Do not forget that the evaluation is what shows the fair market value of a property. Therefore, an appraisal contingency is significant because it protects you in a situation where the sales price is not at par with the fair market value.

Home sale contingencies 

The home sale contingency is the favorite among property buyers. This contingency gives you a specified period to locate a buyer for your home. If this is not achievable within the stipulated time, you have the privilege of abandoning the sales without anything happening to your money. However, this contingency is not popular among sellers, so not often practiced.

Title contingencies 

Title contingency is also significant in real estate investment. A title to the home is a record that gives information about the ownership of a property. It is a legal document that indicates the people that have owned a property in the past and present. Apart from that, it also gives a record of any judgment made in the past regarding the property.

Be sure to read up and educate yourself on various contingencies that could apply to your sale agreement, so you always have protection. Let your real estate professional advise you about appropriate contingencies to accept and ones to avoid.

About the Author
Author

Kim Ellis, REALTOR

Kim Ellis has been a Naples resident since 1975 and has been licensed to sell Real Estate in Florida since 1990. She obtained her Broker’s License in 2000 and holds her GRI (Graduate Realtors Institute), ABR (Accredited Buyer’s Representative) and e-Pro designations. Kim has been an active volunteer with Collier County Public Schools for many years and was the coach for the Palmetto Ridge High School Girl’s Lacrosse team for their inaugural season. When Kim isn’t at work she and her husband Bob will be found enjoying their time with their large family which all reside here in Naples. Kim has been a multi-million dollar producer with John R Wood since October of 2000 and specializes in Single Family Home sales. If you have a home to sell or wish to buy one Kim has vast knowledge of the local market and can surely help. Give her a call today and you won’t be disappointed.