Clear Contingencies
There are three basic contingencies: Inspections, Appraisal, and Financing. Their purpose is to protect you by making sure you are getting the home you expect at a price that is fair and you can afford.
BASIC INSPECTIONS: General Termite Radon
The purpose of the general inspection is to identify major concerns with the property and educate you on the general condition of the property, not find every single imperfection or issue.
- Other available inspections include HVAC, Structural, Sewer, Survey, etc.
- Common repair requests include: Fixing faulty outlets, repairing plumbing leaks, replacing broken window seals, and structural corrections if necessary.
Regardless of the market we’re in, we’ll advise you to focus on the items related to the safety and function of the home when we negotiate repairs.
OLDER HOME
Common items on the report include outdated electrical or plumbing, etc. An older home may not be up to all the current codes for new construction, but that isn’t always a safety problem.
NEW CONSTRUCTION HOME
Most builders also provide a 1-year Home Warranty and will offer a walk through after 1 year in the home. We still recommend a General Inspection on a new construction home during closing or before your 1 year expires.
NEWER HOME
A home is considered “newer” when it has been built sometime within the past 20 years. Newer homes will often have older but functioning appliances and home systems (HVAC, etc) and may have signs of normal wear and tear. Updates and upgrades are not typically part of repair negotiations.
Appraisal
If you are taking out a loan for your home purchase, your lender wil require an appraisal to verify the home’s value. If the appraisal comes back below the contract price, a Buyer has 3 options:
- Buyer & Seller can renegotiate the price of the home
- Buyer can come up with the difference out of pocket
- Buyer can terminate the contact
Financing
During the Financing Contingency, your loan wil go through two stages: Processing and Underwriting.
Processing
Al information provided by the borrower is verified. This information includes verification of the borrower’s employment, identity, income, and assets.
Underwriting
Underwriters review all documentation in the Buyer’s file. They make sure al program guidelines are met. After the review is complete, the underwriters issue a loan approval.