One of the most common parts of a home purchase offer is the list of contingencies the buyer places on the contract. Contingencies are conditions or requests of the deal, and the seller of the house will not accept the offer without carefully considering each one added to the contract. If you are buying a house in a buyer's market, contingencies will not have huge effects on a deal, but if you are buying during a seller's market, contingencies can affect the deal. Here are some of the effects, of adding contingencies to a purchase offer, that you should understand before you write your offer and include some.
They Can Delay Closing
Certain contingencies added to a purchase offer have the ability to delay closing on the house. It is important to know that this is not the case with all contingencies. An example of a type that would delay a home sale is one that requires the buyer to first sell their home. In this situation, the closing on the house the person is buying would not be able to go through until after the person closes on selling their current home. This type of contingency could delay a closing for months or longer.
They Can Increase Expenses for the Seller and Save You Money
Contingencies also affect sellers, in some cases, by increasing their expenses in the deal. For example, if you are asking the seller to fix or renovate some part of the home, the seller will have to pay for these expenses out of his or her own pocket. This is definitely an effect of certain types of contingencies, and sellers will always factor these costs in when reviewing any purchase offer received.
They Can Break a Deal
There are even some types of contingencies that can break a deal, even after the seller accepts the offer and follows through with everything they agreed to. An example of this type of contingency is a home inspection gone bad. If the inspector finds an issue with the home that is serious in nature and costly to fix, it could cause the buyer to decide not to go through with the purchase of this home.
Adding the right contingencies to the offer you write up is important for your protection and investment, but you should always discuss this issue thoroughly with a real estate agent before determining what contingencies to add because sellers will closely evaluate every single contingency when deciding how to respond. Contact a real estate agent service for more information.