At the moment, the home buying challenge is a difficult one. Why? Because it’s a seller’s market: the housing supply is low and the number of buyers on the prowl for a new home is high. One of the things many buyers are doing to make their bids stand out is to waive certain contingencies. While you might be willing to do so, the following are three contingencies you should be sure to keep despite what the competition may be doing.
- The home inspection contingency – Most home sales are contingent on a professional home inspection. This ensures that you don’t buy a house that’s riddled with expensive problems you didn’t know about (such as having to replace the roof). If you waive this contingency, you could end up buying a lemon without much legal recourse.
- The appraisal contingency – An appraisal gives you information about the property’s value vs. what the seller is asking for it. The appraisal is important because your lender wants to make sure it’s not lending you more than what it’s worth. If you waive the appraisal and sign on the dotted line, you may end up having to pay the difference between the appraisal and the cost since your lender won’t cover that. If you can’t cover those costs out of pocket, the deal could fall through.
- The financing contingency – The financing contingency states that your offer is dependent on your ability to secure a loan. If you waive this contingency and you end up being unable to get the loan you need, you could lose your deposit.
If you’re looking to buy a home soon, don’t waive any of these contingencies in an attempt to craft a more competitive offer. For more home buying advice, be sure to contact us at Randy Lindsay today.