When you buy a home in Grand Junction or any of the surrounding communities, you’ll probably hear the term contingency.
But what is a contingency, and how will contingencies affect your real estate transaction whether you’re buying or selling?
What Are Contingencies in Real Estate?
Contingencies are conditions outlined in real estate contracts. They may require the seller, the buyer, or both parties to do certain things before the deal can proceed.
Some of the most common contingencies involve home inspections, financing, and appraisal.
Home Inspection Contingencies
For most buyers, it makes sense to include a home inspection contingency in a real estate contract. The inspection contingency gives buyers the right to have the home inspected by a professional, and if something’s wrong, the buyer can ask the seller to fix it or walk away from the deal.
A financing contingency says that if you can’t get the money from a lender to purchase the home, you can back out of the contract. (You wouldn’t want to be forced to buy a house that you couldn’t pay for, and a seller wouldn’t want that, either.)
Your lender is going to require an appraisal before they’ll give you the money to purchase a home. If the appraisal comes back for a lower amount than you’re supposed to pay for it, the lender probably isn’t going to give you the cash. An appraisal contingency gives the buyer the right to cancel a deal if the home isn’t worth the seller’s asking price.
Are You Buying a Home in Grand Junction or the Surrounding Communities?
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