Just like much of the rest of the country, the Westfield real estate market appears to be transitioning from a hot seller's market to a more balanced one. We see fewer and fewer bidding wars nowadays. In turn, buyers now seem more comfortable asking for certain conditions (aka contingencies) than they have in a while. Even so, buyers need to temper just how many of these conditions they include in their offer. Otherwise, the seller may decide to refuse it. However, there are a few common contingencies that buyers can feel comfortable including as part of the sale.
Common Contingencies to Ask for When Buying a Home
Home Inspection Contingency
While not legally required for most New Jersey home sales, I always suggest that buyers put this contingency in the sales contract...even with new construction. You need to know what condition your property is in before you invest so much money in it. Some more serious issues may lie beneath what a simple layman's walk-through would show. An inspection typically costs between $300 and $400. This must be paid by the buyer once the inspection is done. Inspectors visually inspect the foundation, roof, electrical system, air conditioning system, and plumbing. If they find areas of concern, you may need to hire other inspectors who specialize in those specific areas for further investigation at an additional cost.
Financing Contingency
Unless you pay for your entire home purchase in cash, you may want to include a financing contingency in your sales contract. Pre-approval helps reduce the chances of your financing falling through. However, this contingency protects your Earnest Money Deposit in case your lender denies your loan.
Appraisal Contingency
Whenever you finance a home purchase, the lender requires an appraisal. So, another one of the common contingencies to include in your sales contract is the appraisal contingency. If the home does not appraise for what you need to borrow, your lender will not approve the loan. When that happens, you have three choices. One, renegotiate the sales price. Two, come up with the difference out of your own pocket. Or three, walk away.
Home Sale Contingency
Finally, if you need to sell your current home in order to fund your next one, add the home sale contingency to your contract. One way to avoid this issue is to sell your current home before looking for a new one. Yes, that means moving twice (once into a short-term rental and then again when you find your next home). But it also sets you above other buyers that may have to sell their homes first.
The fewer contingencies you include in your offer, the better. It makes for a smoother real estate transaction. And that's what sellers appreciate even more than the price. When you decide you want to buy a new Westfield area home, contact me.
Scott Gleason, CRS at Coldwell Banker Realty – East, NJ Luxury Homes
Originally posted on my NJ Luxury Homes real estate blog here: https://luxuryhomesnj.com/2022/09/16/common-contingencies-to-ask-for-when-buying-a-home.
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