You’re making an offer on a new residential property. You know that most people put contingencies into these offers. They set things up so that they can walk away from the offer if the contingency isn’t met.
A home inspection contingency is one of the most common examples. After making the offer and having it accepted, the inspector will come through and look at the home. If the home passes inspection, then the potential buyer still has to honor the offer that they made. But if the home does not pass inspection, then they are not obligated to continue buying it for the asking price and they don’t lose their earnest money.
You don’t want to make any mistakes when you’re buying a property, So should you use this type of contingency?
The contingency protects your investment
One of the best reasons to use this contingency is because it protects your investment in the home. You’re not forced to buy a home that has serious issues that will need to be addressed. You won’t feel like you’re being pressured into making a purchase just so you don’t lose your earnest money. The contingency gives you some of the power to make sure you know the quality of the home that you’re buying.
The contingency allows you to move quickly
The real estate market often moves quickly. You may find a house that you want and have to decide if you want to make an offer right away. It’s just not a long enough time to decide if the house is in good condition to buy, at least not in every situation. Knowing that the inspection is still going to occur allows you to make that offer without fear that it’s a bad move.
Some sellers don’t like it
If there’s one downside to using a contingency, it’s that some sellers are more interested in offers that don’t have contingencies. If the seller knows that they’re going to get a lot of offers either way, they may skip over yours if they know they can accept a similar offer from someone else who didn’t put that contingency in the contract.
This is just one part of buying a new home and you can see how important it is to get the details right, so be sure you know about your legal options.