Long Island Real Estate Fun Fact Friday What Are Contingencies?

By
Real Estate Agent with The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803
In today's Real Estate Market, with homes selling quickly, buyers asking for contingencies may not win the bid. In any event, what is a contingency?
 

The 3 most important contingencies for a buyer in a home purchase on Long Island are the home inspection, financing, and the appraisal.

 

  • The Home Inspection: If there are issues with a home after the home inspection, a buyer can withdraw the offer, or have the seller set aside funds to have these issues corrected, or have them repaired before closing.

 

  • Financing: (Mortgage Contingency): This gives the buyer time to obtain financing for the purchase of the property. If they are unable to acquire the funds needed, they will be able to receive a full refund of their deposit. So, if the buyer’s lender denies the loan, the buyer is not obligated to purchase the property.

 

  • Appraisal: This ensures the bank or mortgage company that the property they are giving a loan on is valued at least the amount of the accepted offer. If it does not appraise, the buyer can put down a larger down-payment, the seller can reduce the price, or the buyer can get out of the contract.

 

If the seller accepts these conditions, both the buyer and seller will sign the contract. Once that contract is signed, first by the buyer and then the seller, both sides are bound by the agreements they made. These would be the terms of the contract.

 

 

Do you have questions about buying or selling a Long Island Home or Condo?

 

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If your home is listed with another broker, this is not a solicitation of property. This does not suggest broker has property currently available. Reproduction of text/images contained herein without the express written consent of the authors is strictly prohibited.Sale May Be Subject To Term & Conditions of An Offering Plan.Disclaimer: While information is believed to be accurate it's represented subject to errors, omissions, changes or reliance on information & must be verified by prospective consumer. The authors disclaim liability for any damages/losses, direct or indirect resulting from anything contained herein or the accuracy of comments or opinions of visitors.​©2008-2021
 
 

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Comments (10)

Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

The contingencies you list or necessary and buyers should not have to give them up.

Oct 22, 2021 04:16 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Sheila and Larry - real estate lingo can be confusing so anyone who is looking to make a move on Long Island is advised to consider you for their real estate representation.  Having local knowledge and a record of success is important.  

Oct 22, 2021 04:28 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Larry and Sheila. When I first entered the business "caveat emptor" applied and nobody got an inspection. The most important clause was financing since people only applied for a loan after they had an accepted contract. The financing cluase contained a statement about appriaising but it was not an issue since most lenders back then had inhouse appraisers. Oh, how times have changed. Prehistoric Wayne signing out! Enjoy your day.  

Oct 22, 2021 04:41 AM
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Some Buyers are willing to wave one or all these contingencies to get the offer accepted, big gamble!

Oct 22, 2021 04:47 AM
Tony Busanich
TD Bank - Freehold, NJ
1-4 FAMILY HOME LOAN SPECIALIST

Hi Larry & Sheila. Thank you for the post and all the excellent information. If everyone followed your 3 rule for buying a home the process would go through much smoother. 

 

Oct 22, 2021 05:26 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great explanation, Sheila and Larry. In North Carolina... we have no contingencies. We're a due diligence state. And our contract states in bold letters that it's not contingent on obtaining financing.

Oct 22, 2021 05:45 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good information to share.

Have a great day and an outstanding weekend.

Oct 22, 2021 08:00 AM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Good morning Larry and Sheila,

We are well acquainted with contingencies, and you gave a great explanation.  A

Oct 22, 2021 08:40 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Sheila and Larry and great information to explain to clients in your area.  Make it a great week.

 

Oct 22, 2021 09:55 AM
Rocky Dickerson
Realty One Group - Las Vegas, NV
Superior Service!

Contingencies can have a huge impact. Especially contingent upon the sale of buyer's home

Oct 24, 2021 06:38 PM