headaches later.
STAGE 4: CONTINGENCIES
Don’t get freaked out by the word “contingencies.” It only means that the seller has accepted an offer but closing a deal depends on certain conditions being fulfilled by each party. If the contingencies are not met, each party to the deal is free to walk away.
Here are the most common contingencies.
Financing contingency: This allows the buyer to walk away if he is unable to secure a mortgage by a certain date. It’s also a good contingency for you, because it puts a fence around how long a potential buyer can tie up your property while he searches for the money to pay for the deal. Inspection contingency: Unless the buyer is planning on tearing the house down, he’ll want to hire an inspector to give the place a good going over. If major issues or problems are found, the buyer can walk away, or ask the seller to perform or pay for repairs. The inspection is typically conducted within a week to ten days of signing the contract. An inspector will scrutinize the exterior and interior of the property, including plumbing, ventilation, and wiring. Often, buyers will use whatever defects the inspector finds to get a price break on the house. Or have the seller arrange for the repairs. Sale of current home: This ensures that the buyer is able to sell his current home before he’s absolutely obligated to buy yours. If he can’t sell, he can walk away from your contract. In a seller’s market, you’d be crazy to accept this kind of contingency. But as a last ditch effort to sell your home in a slow market, you may have to swallow this contingency and hope for the best.
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