The 4-1-1 of Contingencies

Dated: February 23 2021

Views: 443

A word that anyone who is going through a house sale should know is “contingency.”

And along with that, understand that just because a bid is accepted, doesn’t mean that the deal is going to go through.

How it works: A bid is made with the understanding that it is contingent on having the house inspected, with the buyer needing to approve the results. Contingencies are part of any standard contract and define the efforts that must be done before a deal is finalized in addition to the inspection, such as financing, insurance and agreed-upon repairs.

All of this is necessary because if something that was agreed upon is not done as stated, the potential buyer has an out. For instance, suppose the sale was contingent upon the seller taking out the living room carpet or fixing a crack in the chimney, and those weren’t done by closing time, well then, the buyer is not required to go through with the deal.

There’s also something called a financing contingency, which is on the onus of the buyer, and states that they must secure an acceptable mortgage or obtain other means of financing to buy the home. This becomes a safety net for the seller that ensures the sale will go through. If not, the seller can re-list the home.

Other popular contingencies include the seller asking that the deal be made contingent on him or her successfully buying another home, or the buyer making the deal contingent on selling his or her own home.

A home sale contingency can be risky to sellers as there’s no guarantee that the other home will eventually sell. Even if the contract allows the seller to continue to market the property and accept offers, the house may be listed “under contract,” making it less attractive to other potential buyers.

Obviously, the most significant part of any contingency is putting it all in writing. As your REALTOR®, I will be able to lead you through what needs to be done.

A home transaction is one of the most important things you may ever do, so make sure you take all the proper steps to ensure you get what you pay for.

Blog author image

Keith Sharick

Keith Sharick, with HER Realtors, is an experienced REALTORĀ® who assists both Buyers and Sellers in Columbus, Ohio and all surrounding areas in making their real estate dreams come true! An HER Realt....

Latest Blog Posts

The 4-1-1 of Contingencies

A word that anyone who is going through a house sale should know is “contingency.”And along with that, understand that just because a bid is accepted, doesn’t mean that the deal is

Read More

Decluttering: Selling Your Stuff Online

One of the most important steps to making your home look its best is to get rid of stuff. We accumulate a lot of things after living in a house, and when it’s time to sell, all of those

Read More

Decluttering Before You Move

Getting rid of things you no longer need is a vital step in the moving process because it serves two purposes. First, it’s a key component of home staging because too much stuff can make a

Read More

How Much Money Do You Need for a Down Payment?

Buying a home often requires years of saving for a down payment, which is money that a buyer pays upfront toward the cost of a house. This is the immediate equity that a buyer has when purchasing a

Read More