What Does “Contingent” Mean When Buying A Home?

by Kristen White Blogger When buying a home, you should expect negotiations to be a major part of the process. It can seem like a battle at times trying to strategically make an offer that the seller may or may not take. The seller might offer you a home for an amount of money, however, that isn’t to say that you cannot offer less. Thus, most home sales lead to negotiations, and you will probably end up having a contingent offer made.

What Is “Contingent” In Home Buying?

An example of a contingent is as follows: You find a house you really like among the Newport Coast Homes for sale, and you can afford it. But rather than make the deal immediately, you first want to inspect the house thoroughly to make sure there aren’t any problems with it. If you and the seller agree on an offer, you should let the seller know that you want the deal to be contingent on your inspection of the home.

This wouldn’t exactly mean you would back out of the deal if you were to find a problem. Usually, the buyer and seller work something out so that the buyer’s problem with the home is solved and the home is sold.

Here are four types of contingencies that are common in the sale of homes and property.

Inspection Contingency

As mentioned before, inspection contingency involves undergoing an inspection on the home before the deal is final. Some sellers even conduct their own inspections before they sell their home.

Appraisal Contingency

Appraisal contingencies involve the lender who lends money to buyers in order to buy a home. The lender will declare how much money the home is worth via an inspection, and the seller must take the offer or cancel the deal altogether.

Financial Contingency

A financial contingency is when you want to buy a home, but aren’t yet sure if you can afford it. You do not want to jump through hoops to find the right home for you only to realize that the loan you need is one you cannot qualify for. This is why it is a good idea to get pre-approval on a mortgage.

First Right Contingency

This contingency gives another buyer the right to match the offer before the seller finalizes the sale. Usually, there are times where a friend, relative, or other acquaintance is looking to buy a home early on in the selling process, but you want to explore other options, too. This is where a First Right Contingency falls into play, so that you can give others a chance to buy the home while still having it sold at the price you want.

Contingencies are often entered into to ensure that the buyer gets when he or she wants in a home and the seller closes the deal with no trouble. The next time you are looking for a home, think of what contingencies you would like before you go through with the deal.

Summary

Contingent means the buyer and seller mutually agree on a deal, but it is not yet final. Additional requirements often need to be met before the sale on the home is official.

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Created on Jan 24th 2020 05:36. Viewed 209 times.

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