If you’re like many people, you know how important it is to work with a real estate agent when buying a home. Part of that is because your real estate agent will build contingencies into your contract that help protect you throughout your transaction. With that said, this guide explains three contingencies you shouldn’t waive when you purchase a home in Scottsdale.
3 Contingencies You Shouldn’t Waive When You Buy a Home in Scottsdale
Check out the three contingencies you need when you buy a home in Scottsdale:
- Home inspection
- Appraisal
- Financing
Here’s a closer look at each.
Contingency #1 You Need When You Buy a Home: Home Inspection
Your real estate agent will build a home inspection contingency into your real estate contract. That contingency lets you back out of the transaction if your home inspector turns up something you just can’t deal with – and you can do so while getting your earnest money back.
It almost never makes sense to waive your home inspection contingency, anyway. That’s because you need an inspector to tell you about all the issues facing a home you’re interested in purchasing; without a home inspection, you’re essentially going in blind.
Contingency #2 You Need When You Buy a Home: Appraisal
If you’re taking out a mortgage loan to purchase a home, your lender will send an appraiser to the home to determine how much it’s worth. Sometimes, appraisers determine that homes are worth less than what the seller is asking. In a situation like this, the lender won’t allow you to borrow the full amount you need to buy the home. You have a few options if this happens; you can ask the seller to lower the price, you can come up with the remaining money on your own, or you can walk away from the deal. However, if you don’t have an appraisal contingency built into your contract and the home appraises low, you’ll most likely lose your earnest money deposit if you walk away from the transaction.
Contingency #3 You Need When You Buy a Home: Financing
Nobody wants to be on the hook for purchasing a home they can’t afford, so it’s important that you have a financing contingency in your real estate purchase contract. The financing contingency says that if you are unable to secure financing after making a good-faith effort, you’re off the hook.
Other Contingencies
Your real estate agent has the option to build a number of other contingencies into your contract to protect you. Your agent will do so based on your specific needs. However, be wary of adding dozens of contingencies into your contract, which can be off-putting to some sellers.
