Contingencies To Include In An Offer To Purchase A Home

Buying your home is an exciting time all around. You get to close one chapter of your life and begin another anew. This is even more exciting – and anxiety-inducing, no doubt, - if this is your first home. If you have finally found your dream home, you might be jumping to pitch an offer to purchase a home. This is understandable but you need to bear in mind that you need to be able to adequately protect yourself should things go awry. This article will give you an overview of the most basic contingencies that you should take note of before you jump the gun.

The Home Inspection Contingency

So, you may have visited your dream home multiple times and found it to be perfect in every conceivable way. That is all well and good but do ensure that you get it checked by a trained or professional home inspector. They can detect issues with electricity and plumbing or even structural issues that you may not have even noticed. This contingency is sure to protect you because you can take a huge financial hit if you overlook a major issue. With this contingency in place, you won’t have to worry about making a poor property investment.

The Appraisal Contingency

This contingency is, strictly speaking, to protect lenders such as banks more than buyers. However, as you’ll see, with this contingency in place, you will have peace of mind. This contingency is in place to ensure your lenders that your home is worth how much you are paying for it. Moreover, it helps them because if you happen to default on your loan, they can reclaim their losses by selling off your home. This enables you to back out of the offer if the appraisal deems that your home is not worth as much as it is listed.

The Financing Contingency

This clause is usually put in place to help home buyers back out of their deal if they are somehow unable to get approved for a mortgage to purchase their home. It also protects the bank that is lending you the money. They can then verify your financial portfolio and salary and ensure that you can back out if you really can’t afford the property.

The Clear Title Contingency

This contingency ensures that buyers can walk away from the home if there are liens or judgments put in place on the property title. This is the document that shows the ownership of the home and whether there is any mortgage. The seller must satisfy these before selling the home. If they are unable to, the buyer is protected.

The Home Owners Association Contingency

This contingency will apply if the home or condominium that you are purchasing falls under the supervision of an external home owner association. It will give you the time to review and read any documents and agreements that have been put in place. Should you not receive these in time or not agree with the stipulations, you’re free to walk away. An expert opinion is useful when buying a home so feel free to contact us when in doubt!