INDUSTRY VOICES
CONTINGENCY CLAUSES
are increasing so quickly that comparable sales often cannot keep up. This tends to be especially true at the beginning of the spring market, due to a dearth of sales in late fall through the holidays. Personal Insight: In the Greater Boston area where I work, keeping the appraisal contingency in a multiple-offer scenario nearly guarantees your offer will not be accepted. You do have options, however. A buyer with a mortgage contingency might be protected even if they remove the appraisal contingency since they simply will not be approved for the home loan if the property does not appraise. If you have questions about waiving the appraisal
contingency, I would ask your agent and your real estate attorney. Your agent can tell you what local homes have sold for and give you an idea if he or she thinks there would be any issues with your appraisal. Home Inspection Contingency This contingency states that the home must pass a professional inspection or the buyer does not have to make the purchase or the seller must remedy any problems.
home appraised for; the buyer can come up with additional funds to make up the difference, or there can be a mixture of both where the seller reduces the price and the buyer comes up with additional cash. To sellers, buyers with a higher down payment are preferable to buyers with low down payments because if the home doesn’t appraise, the buyer conceivably has the cash to contribute to any difference between the appraisal and offer price. Buy- ers can also fight the appraisal and order a second one through their lender. This costs money and often the second appraisal is no different than the first.
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KristinWeekley is a real estate agent with Laer Realty Partners. She may be reached at KWeekley@LAERrealty.com.
Appraisals are tough in the current hot market because prices
3Ways to Use Contingency Clauses to SafelyMake a Good Offer REMOVING CONTINGENCIES CAN MAKE YOUR OFFER ATTRACTIVE, BUT SAFETY IS VITAL.
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t’s a seller’s market in almost all major markets in the US right
my clients and their money. Striking a safe balance is essential. This is the case whether the buyer is an experienced investor or a first-time homebuyer. So, what are the different contingencies and how to do you safely remove them? Appraisal Contingencies The appraisal contingency in an offer states that the home must appraise at the amount for which it is under agreement. Removing this contingen- cy can legally obligate you to purchase the property for your offer price, pro- viding a seller with greater security that a sale will go through.
CONTINGENCYCLAUSE: A contingency clause is a condition or action that must be met before a contract becomes binding. For example, a buyer might include in an offer that a property must meet certain requirements in terms of value or condition before their offer becomes binding.
now. Most buyers, whether they are in- vestors with a lot of cash or buyers with five percent for a down payment, have one focus: How do I get the property that I want to buy? The main concern I have as a buyer’s agent is protecting my clients during the process. The appraisal, mortgage, and home inspection contingencies all go a long way in protecting my clients. However, removing these contingencies can make your offer more attractive to a seller, and that is vitally important these days. When buyers agree to remove con- tingencies, it’s a much riskier process for
If the appraisal comes in low, the sale can proceed in multiple ways: The seller can reduce the price to the amount the
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