When writing an offer on a Westfield home, buyers must consider what types of contingencies (if any) they want to include. Contingencies stipulate specific conditions that must be met before a sale can be completed. If these conditions are not met, these contingencies allow a buyer to walk away from a sale and keep their earnest money deposit in the process. But buyers need to keep contingencies to a minimum, especially in a seller's market. Otherwise, a seller may pass on their offer and move on to someone else. Here are common contingencies we see in the Westfield real estate market.
Common Contingencies for Home Buyers
Unless you plan to pay for your home with all cash, It is extremely important that you talk to a lender about securing financing before you even start looking at Westfield houses. But, pre-approval does not necessarily guarantee final loan approval. Therefore, one of the most common contingencies to include in a purchase agreement is a mortgage contingency.
Another one of the common contingencies we see in the Westfield real estate market is the appraisal contingency. This goes hand-in-hand with the mortgage contingency. A lender will not approve a mortgage loan if the amount to borrow exceeds the appraised value. So, even with pre-approval, your loan may fall through. To continue the sale, either the seller must come down in price or you must make up the difference out of pocket. If an agreement cannot be met, the buyer may want to walk away.
Many home buyers must sell their current property before they can buy a new one. That is where the home sale contingency comes into play. Most of these types of common contingencies include a time limit (30 to 60 days, typically). If your current home does not sell in that time frame, this gives you the ability to back out of the sale agreement while keeping your earnest money deposit.
The final one of the common contingencies I will be talking about in this blog post is the inspection contingency. Savvy home buyers hire an inspector to officially look over a property before they purchase it. An inspector may find something that you might have overlooked on your walkthrough. Their experienced eye can spot current issues as well as potential problems down the road. In turn, you can use this to your advantage come negotiation time.
Talk to your Westfield REALTOR® about which common contingencies to include in your offer and which to leave out. Use our knowledge to help guide you through a successful home buying experience.
Originally posted on my Westfield area real estate blog here: https://www.luxuryhomesnj.com/westfield-buyer-tips/common-contingencies-home-buying/.