Protecting Yourself With Contingencies

Think of a contingency clause as insurance. Once you find a home and make an offer, you hope everything will go smoothly; but in case it doesn’t, you have a contingency clause in place that allows you to back out of the contract without losing money.

Most agreements already have a few key contingency clauses in place to protect against the bigger things—such as a lower-than-anticipated home appraisal—but there are contingencies that go beyond the norm. If you’re about to make an offer, consider all of your options.

Standard contingencies

Some contingency clauses are commonly used when making an offer. Some examples:

Home inspection: This gives the buyer the right to order a professional home inspection and back out of the sale if major unreported damage is found.

Appraisal: The buyer won’t be obligated to buy the home if the appraisal value is lower than the asking price.

Mortgage availability: This gives the buyer time to find financing for the home. If the buyer can’t find financing, either party can cancel the deal. IN today's market, it is best to have all of your financing in place in advance.

Atypical contingencies

You don’t have to stick with the standard contingency clauses. Depending on your situation, it may make sense to add additional clauses to the agreement. Some examples:

HOA rules: If you’re considering an area with a homeowners association, it may be prudent to require a copy of the HOA guidelines before you buy. HOA fees vary and if the dues are high, your annual homeownership costs will go up. Many HOAs also have rules on parking, landscaping, paint colors, and even holiday decorations. If you aren’t happy with the HOA, you’ll want the option to back out of the deal.

Selling your current home: If you’re trying to sell your home before you buy another one, you may want to put a selling contingency in place. If you’re unable to sell your current home within a certain time frame, this contingency allows you to cancel your offer.

Moving furniture early: With this contingency, you and the seller agree to allow you to move personal property in (or move in entirely) earlier than the seller anticipated. You may have to agree to pay the seller rent if you move in before closing, but it will spare you from putting your belongings in storage and finding temporary lodging.

Adding contingency clauses

A basic offer won’t automatically contain any contingency clauses. While many Realtors® include some standard clauses in every offer, you should work with your agent to make sure you’re including contingencies for everything you can anticipate before you submit your offer.

Once you’ve submitted the offer, keep in mind that the seller may submit a counteroffer with his or her own contingency clauses as well.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.

                       408.687.2026 |  Julie@JulieWyss.com | www.JulieWyss.com

Get A Realtor to Ensure Home Buying Success

Buying and selling real estate is a complex matter. At first it might seem that by checking online sites you could quickly and easily find the right home at the right price.

But a basic rule in real estate is that all properties are unique. No two properties – even two identical models on the same street – are precisely and exactly alike. Homes differ and so do contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike.

In this maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area.

How Do You Choose a REALTOR®?

In every community you’re likely to find a number of realty brokerages. Because there is heated competition, local REALTORS® must fight hard to succeed in your community.

There are numerous places to find the right Realtor for you. Sources include open houses, local advertising, websites, referrals from other REALTORS®, recommendations from neighbors, and suggestions from lenders, attorneys, financial planners and CPAs. The experiences and recommendations of past clients can be invaluable.

In many cases buyers will interview several REALTORS® before selecting one professional to work with. These interviews represent a good opportunity to consider such issues as training, experience, representation and professional certifications as well as the personal rapport you have with each potential candidate.

What to Expect From a REALTOR®

Once you select a REALTOR® you will want to establish a proper business relationship. Some REALTORS® represent sellers while others represent buyers and some do both. Each REALTOR® will explain the options available, describe how he or she typically works with individuals and provide you with complete agency disclosures (the ins and outs of your relationship with the agent) as required in your state.

Once hired for the job, the REALTOR® will provide you with information detailing current market conditions, financing options and negotiating issues that might apply to a given situation.

Remember: Because market conditions can change and the strategies that apply in one negotiation may be inappropriate in another, this information should not be set in stone. During your time in the marketplace REALTORS® will keep you updated and alert you to each step in the transaction process.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.

                  408.687.2026 |  Julie@JulieWyss.com | www.JulieWyss.com