One significant part of a real estate purchase offer is the contingencies the buyer adds to the contract. Contingencies are things that the buyer asks for in the deal, and the two parties often negotiate on these things. If you are buying a house, you should talk to your Realtor about the contingencies you can add. You should also ask the agent's advice about which ones to skip.
The Definition of a Contingency
The first thing to understand about contingencies is what they are and how they work. You can add zero contingencies or many. It is up to you, but you should realize that the seller will carefully read over each one. The contingencies you ask for affect the deal for the seller, and sellers often make counter offers based on the contingencies included in the offers. Each item you ask for is a contingency. Some contingencies are more like conditions that you must meet to close on the house. Others are conditions that you must agree to.
Contingencies to Include
There are several contingencies you should always include when buying a house, including the following:
- Home inspection – This contingency allows you to back out of the deal if the inspector locates big issues with the home.
- Mortgage – When you add this condition, you can back out of the deal if you cannot qualify for a mortgage.
- Appraisal – Getting an appraisal on the house is routine, and adding an appraisal condition lets you back out if the house is not worth the price you are paying.
These are some contingencies you should not skip when writing an offer.
Contingencies You Could Skip
If you want the seller to accept your offer, you may want to skip adding other contingencies. For example, you could skip a condition that asks the seller to pay some of your closing costs. You could also skip a contingency that requires the seller to address and fix minor issues in the house. Your real estate agent can help you decide what to include in the offer that you write for a house.
When the seller receives your offer, he or she will thoroughly examine your contingencies. If you want the seller to accept the offer, you should limit the number of contingencies you add to the contract. You can talk to your real estate agent to learn more about the conditions you should add and which you should skip.