What contingencies should be put in an offer?

So you have been attempting to sell your home for some time and have finally received an offer that you feel is acceptable for your home. However, you notice that in your offer that there are clauses (or contingencies) that, if executed, will forfeit the offer. Consequently, receiving an offer to purchase your home does not necessarily mean that your home is sold.

Before you panic and start dreading the possible contingencies that will be included on an offer, you should understand that contingencies are usually standard and are not designed for a potential homebuyer to exploit the home seller. Rather, contingencies are put in place to ensure that both sides of the property transaction are receiving a fair deal. To answer the question, “What contingencies should be put in an offer,” there needs to be an understanding that there are two principle standard contingencies. The first of these standard contingencies is a financing contingency. The purpose of the financing contingency is to protect the homebuyer from being forced to honor a commitment that they are financially unable to do. With a financing contingency, the potential homebuyer’s offer is conditional on their ability to obtain a loan commitment from a lender.

The second standard contingency is an inspection contingency which protects the buyer from purchasing a home with major problems that were hidden by allowing the prospective homebuyer to hire professional inspectors to inspect the sale property.

Besides these standard contingencies, there are a variety of issues that need to be clarified on a purchasing offer. For example, the home seller may have the right to keep the homebuyer’s deposit under some situations where the offer is forfeited. For example, if a buyer backs out of the property transaction for a reason that is not stated in the offer, their deposit is also forfeited.

Additionally, the purchasing offer must also clarify what the seller’s responsibilities are. Such tasks may include passing a clear title, maintaining the property in its present condition, and making any repairs that were requested within the offer. If these conditions are not followed by the home seller, the prospective homebuyer has a legal right to break the contract.

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