A contingency is something that may or may not happen in the future. In real estate, that translates to an offer accepted but the final sale depends on certain criteria that has to be met or the potential buyer can back out of the deal.
The most common types of contingencies in real estate are: Appraisals, meaning the estimate of a property’s value by a licensed appraiser. “If the appraised value proves to be less than the sale price, the home appraisal contingency lets you back out of the deal,” advises realtor.com.
Another common contingency is a home inspection, a complete visual assessment of a home’s condition and any signs of potential problems that could occur. Your Lang Realty agent works with certified home inspectors. The potential buyer is usually present for a home inspection that covers everything from the top down.
The third most common real estate contingency is approval of a mortgage. The important word to remember here is “preapproved.”
“If the buyer can’t get a lender to commit to a loan, the buyer has the right to walk away from the sale with the down payment,” realtor.com advises.
What are the pros and cons of a contingency clause?
Understand that a seller has the right to consider other offers after a refusal, but won’t deal with another buyer until the contingent offer is settled, according to realtor.com. Is having one or more contingencies part of your real estate transaction risky? That’s when the expertise of your Lang Realty agent comes in.
