When Accepting a Contract

Section 4

Contingencies

There are many kinds of contingencies that can be put in a contract.  Some of those contingencies are:

  • Home Inspection
  • Septic Inspection
  • Radon Inspection
  • Termite Inspection
  • Appraised Value  (All homes will usually have this, unless it is a cash buyer.)
  • Buyer Selling their Current Home

Home Sale Contingency

A home sale contingency is like all other contingencies. Until this contingency is cleared, your property is still subject to this condition being met. A home sale is a little more tricky (is that really a word?) than the others because you have NO CONTROL over anything on the other end. But having said that, most ALL re-sale and higher end homes will come with a home sale contingency. People may be moving up into a higher price and will need to sell their home first. Buyers may also need the proceeds from their sale to purchase yours. Whatever the reason, we don’t have a sale until this condition is actually met.
 
There is one “work around”.  We can put a clause in the contract giving the buyer a 48 hour first right of refusal.  Meaning, we can continue to market the property. If another offer is received, the current buyer will have 48 hours to remove the home sale contingency. The drawback to this is simply, most buyers will not want to spend the inspection and appraisal money and not know if they are really going to be able to buy your property. In addition to this, if they could have made it work without this contingency, most of them would have from the onset.
 
Accepting a contract with a home sale contingency is a gamble, but so is everything in life. I take them all the time and 95% of the time they do work out. OCCASIONALLY you will have that one that had an appraisal issue on the other end that will cause a delay in closing, or there could have been structural repairs that none of us were aware of that could cause the deal to go south, but the same thing could happen on your house.

Appraisals

Appraisals are:

  • Required by the Buyer’s Lender.
  • Stay with Property for 6 months on FHA loans.
  • The value is at the sole discretion of the appraiser.
  • Paid for by the Buyer.
Living in Middle TN
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