Protecting yourself as a buyer with the right contingencies

| Mar 13, 2020 | Residential Real Estate

The residential real estate market in New York is highly competitive. That means that both buyers and sellers have to take special precautions to protect their own best interests.

One of the simplest ways for buyers to ensure they don’t wind up in an untenable financial situation is to create contingencies in their purchase offer that protect them and the potential investment they want to make in the property. Depending on your circumstances, there are a number of contingencies that could make you feel more confident in the offer you make on a place you might soon call home.

Make your offer contingent on inspection if you’re nervous

In a competitive market, finding a place that meets all of your criteria and falls within your budget can seem like a miracle. You might wonder if there’s some kind of obvious defect that you’re overlooking in your enthusiasm.

Making your best possible offer but having it contingent on the home passing an inspection and receiving an appraisal that reflects the offer you made or more is a reasonable contingency that ensures you won’t wind up overextended on a property that requires additional investment and work.

 

Make contingencies that protect you if your home doesn’t sell

Another common contingency that buyers often include in their initial offer on a property will be a clause about the sale of their own home. Whether it is currently on the market or about to be listed, the buyer will likely require the equity accrued in their existing home in order to pay toward the purchase price of the new one.

Making the offer contingent on accepting a purchase offer for your property within a certain amount of time helps ensure you don’t wind up stuck with two mortgages and two houses.

Protect yourself in case the seller doesn’t leave

Possession is usually an important part of a purchase offer. Sellers need time to find a place to go and to pack up the rest of their possessions, while buyers are often eager to get their hands on the keys to the new place as soon as possible.

Including a reasonable date of possession and specifically outlining rental costs that cover the mortgage, taxes and insurance if the seller remains in the house past the date of possession can help ensure that you don’t wind up in a situation where you have nowhere to go and no access to your newly purchased home.

Adding the right contingencies can help you feel confident about your offer and more secure as you head toward your closing.