Selling Guide - Home Buying Contingencies

Home buying contingencies are conditions added to a purchase offer.  If you do not meet any contingencies in the offer, your buyer can keep their earnest money and walk away from the deal.  This is another example of why your real estate broker is important to the successful sale of your home.  Part of our real estate services are to help you negotiate and manage the completion of contingencies to get you through the threshold to closing day. 

Common contingencies include: 

• an appraisal required by the lender.  If the appraisal is under the offered price, the buyer will need to make up the difference somehow or the deal could fall through.  
• qualification of the buyer to receive the required amount of lending.  If the buyer's credit changes or they experience a financial change, that could kill the deal.
• the buyer may need to sell their current home before they can finance the deal. If the buyer fails to sell their home, they can keep their earnest money and walk away.  In a seller's market, this is not a common strategy. 
• passing home inspection. If upon inspection, the buyer feels repairs are in order, the seller must negotiate those repairs.  If an agreement cannot be made, the deal will break and the buyer can walk away. 
• a cloud on the title.  If the ownership of the home is in question or there are previous debts attached to the property, that will keep the deal from closing unless you can quickly correct it. 

There may be other contingencies special to the buyer, or the area, or the land the home sits on.  While contingencies are likely to be waived during an intense seller's market, they do occur and become commonplace in a buyer's market.