What are the Most Common Contingencies when Buying a Wellington Home?

Wellington Florida Real Estate Q&A

What are the Most Common Contingencies when Buying a Wellington Home?Question:
What are the Most Common Types of Contingencies when Buying a Wellington Home?

Answer: When buying a home in Wellington Florida it is not uncommon for home buyers to include a contingency or contingencies in their offer, but before we discuss the most common types of contingencies let's define what a contingency is.

So what exactly is a contingency?

A contingency is a type of clause added to a real estate contract that protects the buyer. It allows them a certain amount of time to "clear" their contingencies and if they are unable to do so within the given period of time they can usually cancel the contract without penalty,
but it will ultimately depend on how the contract was written.

So what are the most common types of contingencies when buying a home in Wellington? Below I've listed the most common types of contingencies I've come across working with buyers and sellers.

#4 Sale of Existing Home:
Sale of existing home contingency means the buyer must sell their current home before they can purchase a new home and if they are unable to do so within the contingency period they can cancel the contract. While this type of contingency use to be very common I personally haven't had a seller accept this type of contingency in over a decade.

#3 Appraisal:
An appraisal contingency means the home must appraise for the contracted purchase price and if it doesn't appraise within the contingency period the buyer can cancel the contract. However in some cases a home buyer may not need to add an appraisal contingency if they already have a mortgage contingency. Also, just because a home doesn't appraise it doesn't necessarily mean the contract needs to be canceled and buyers can find out what some of the other options are @  "What Happens if the Home I'm Purchasing Doesn't Appraise?" 

#2 Financing:

A financing contingency means the buyer must be able to obtain a mortgage within the contingency period, which is usually 30 days and if they are unable to do so can cancel the contract. While nearly 50% of Wellington home buyers need to obtain a mortgage in order to purchase a home not all of them will include this type of contingency. This is not something I recommend, but I have had several home buyers remove their finance contingency in order to compete with cash buyers and/or have their offer accepted.

#1 Home Inspection:
A home inspection contingency allows the buyer to perform an inspection within the contingency period, which is usually within 5-10 days of the effective date. However unlike a lot of other contingencies a home inspection contingency doesn't necessarily mean the buyer can cancel the contract, it will depend on the contract and addendums used.
A home inspection is something I always recommend regardless if the home is brand new or looks well maintained.

So how many contingencies do most Wellington home buyers include in their offer?

This answer varies, sometimes zero and sometimes 3-4, it all depends on the home buyer along with the current market conditions. In my experience a majority of cash buyers will only have one contingency, the inspection while most financed buyers will have at least two, but once again they may choose to remove or add additional contingencies. My best advice for home buyers is to work with an experienced Realtor who understands the market conditions and how to write a winning offer.

For more real estate questions and answers visit Wellington Florida Real Estate Q&A

If you are looking to buy or sell your Wellington home contact us today! You can reach us 7 days a week by calling 561-333-0446 or via e-mail @ Contact@WellingtonHomeTeam.com


Originally posted at http://wellingtonhometeam.com/what-are-the-most-common-types-of-contingencies-when-buying-a-wellington-home/
 

Michelle Gibson REALTOR®
HANSEN REAL ESTATE GROUP INC.
561.333.0446


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Comment balloon 3 commentsMichelle Gibson • November 11 2014 10:21AM

Comments

Excellent information, Michelle, for those unfamiliar with contingencies in real estate contracts.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 4 years ago

Michelle, this is a great post for buyers (and sellers) to understand the contingencies in a contract.  

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) almost 4 years ago

Hi Michelle -- terrific post that explains contingencies in a concise easy-to-understand manner.   Well-done.   

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) almost 4 years ago

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