REMOVING CONTINGENCIES IN A REAL ESTATE SALES CONTRACT – GOOD IDEA?

In our market, given that we are still seeing multiple offers, it still is not uncommon to have buyers remove contingencies when making an offer in the hopes their offer will be accepted by the seller.  While this may sway the seller your way to accepting the offer – in the end, could it hurt you?

Inspection Contingency – It would never be my advice as a Realtor, to remove your inspection contingency.  There are too many “what ifs” that could go wrong if in fact that strategy was to “win” you the home you wanted.  Once you own the home, you own it … “what ifs” and all!  Had you kept the inspection contingency in the contract, you can always negotiate any of these items with the seller to either fix or ask for a credit at closing.  I always advice my buyer clients to keep the contingency in and ensure the seller that they would only look to the seller to remedy health & safety issues only should they arise.  

Appraisal Contingency – This is another strategy that could “win” you the home in a multiple offer situation, especially if the home is being bided up to a price-point where there is a good likelihood it will not appraise.  In this situation, that strategy would likely “win” you the home, providing the buyer is knowing and willing to pay more for the home should it not appraise at the agreed upon sales price, and the buyer has the additional cash to put down, and providing no other offers are cash offers with the same contingency.

In either of these instances, should you choose to remove any of the above contingencies in your real estate contract, I would strongly recommend that you have a good understanding of what that will look like to you in your particular situation.  Having those conversations with and seeking advice from your Realtor and your attorney is the key to a successful real estate transaction.

Helping buyers & sellers achieve their real estate goals

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