📚 Definition time! Today’s lexicon is “contingent”.
A contingency s the status of a transaction that was already approved, but there are still conditions of the Agreement of Sale that need to be agreed upon for the transaction to complete. Buyers may choose what to include in the contract.
There are 5 common contingencies, according to Forbes:
1️⃣ Inspection contingencies – Inspections can show a buyer the condition of the house that they are interested in purchasing.
2️⃣ Financing contingencies – This gives the buyer time to apply and get approved for a loan to purchase a home. If the buyer is unable to get proper financing, they will be able to look towards other sources or just back out of the sale.
3️⃣ Appraisal contingencies – This ensures that the buyer is protected if the sale price of their home of interest doesn’t align with the fair market value.
4️⃣ Title contingencies – This includes a legal document that explains who has owned the home in the past and who owns the home now. A record of legality issues can also be included.
5️⃣ Home sale contingencies – This allows a certain amount of time to find a buyer for a home. If there is no buyer within the time frame, one has the right to walk away from the sale with their earnest money deposit.
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