The nation as a whole is currently a seller’s market. This means that there are fewer homes for sale throughout the country, so a seller may feel they have the upper hand when negotiating with a buyer and may try to remove contingencies. A contingency is a condition that must be satisfied before the transaction can be completed.
As tempting as it might be, though, there are some areas where buyers should be inflexible, even if it means losing the offer to purchase. Otherwise, it can be very expensive in the future.
Common Essential Contingencies
If you’re looking for homes for sale in Estes Park, the following are five areas where you should be adamant about contingencies remaining in your purchase offer.
- Home Inspection: This is perhaps one of the most important conditions you’ll need. An independent company will inspect the property – both land and buildings in some cases – to ensure there are no significant defects or problems with the electrical, plumbing, roof, and structure, including termites. If issues are found, the seller should be required to correct them before the sale completes. Some of these are governed by state and local ordinances, but some may be outside their purview. “As is” sales are becoming increasingly common, and buyers are increasingly coming to rue their decision to agree to one.
- Septic Systems and Wells: Although this generally applies more to rural areas, it’s an area that should be subjected to a professional, independent inspection before escrow closes. Not only are these types of issues exceedingly expensive to repair, but they can also pose health hazards, so do not agree to an “as is” sale if the property has a septic system or well.
- Appraisal: Your lender will require an appraisal to ensure that the loan is appropriate for the property value. Waiving the appraisal is inadvisable even if you have the funds to cover the difference between the appraisal and the asking price. If the appraisal comes in lower than the asking price, it provides an additional negotiating tool unless the seller is willing to risk losing the sale.
- Financing: Without the sale being contingent upon the buyer obtaining financing, the buyer may forfeit their deposit if they cannot obtain financing. Unless you’re paying cash for the property, this is a contingency that you should never waive.
- Settlement Contingency: If you’ve received and accepted an offer and your current home is in escrow, a settlement contingency can protect you if your current home falls out of escrow. If it closes on schedule or if it doesn’t, you’re protected either way.
It may be tempting to start removing contingencies if you’re in a bidding war, but that’s probably the worst time to do so. The dearth of homes for sale has combined with historically low-interest rates to spur prospective homebuyers almost to desperation. Don’t let that happen to you. If you’re looking at homes for sale in Estes Park, the best place to start is with one of our knowledgeable and experienced realtors.
Call us today at (970)586-3838 and speak to one of our real estate specialists. We can find your dream home at a price that will work, so call us today. You’ll be glad you made the call.