What Contingencies Should I Waive to Get the House?
Do you ever find yourself getting frustrated over the process of buying a home? Homes are selling across the country at lightning speeds – often within a few days. If you’ve been searching for a home for an extended period of time, you may be having a hard time not only finding a home but also getting picked by a seller to close on a deal. You may also be wondering what you can do to increase your chances of success in getting a home.
Let’s turn our attention to contingencies. As a home buyer, you’re likely familiar with contingencies and why they’re important in the buying process. Whether it’s a home inspection, an appraisal, or a financing contingency, these are typically viewed as the main forms of contingencies to put forth as conditions upon moving into a new home. Normally, these are perfectly reasonable conditions to have; however, in this market, there may be situations where you should consider waiving one or more of these contingencies. Let’s go over a few of these situations.
Generally speaking, it’s inadvisable to waive a home inspection. If the home you’re moving into is older, you’ll especially want to consider a home inspection to rule out any hidden, possibly major areas that need repair. If you don’t get a home inspection, you’ll risk being unaware of any critical issues that should have been addressed by the seller – and now you will have to flip the bill for it.
That being said, there may be instances when you want to consider waiving a home inspection. For instance, in many parts of the country you can do what’s often referred to as a pre-inspection before you even make an offer. That way, a seller doesn’t have to worry about an official home inspection conditioning them to attend to certain repairs before a deal can be made. You can even conduct a pass-fail inspection that doesn’t force a seller to repair certain areas but will also give you the peace of mind that, overall, the house is in good shape.
An appraisal contingency rests in the idea that a home will be sold for what it’s worth. With this contingency, a home buyer wants the home to be appraised for what they’re attempting to pay for it. If a buyer puts money down on a home, and it gets appraised for a lower value, the lender will only supply you with the lower amount, and you will have to make up the difference. This is typically why you won’t want to consider waiving this contingency because it can result in major expenses for you if the appraisal doesn’t go your way.
Unless you plan on paying fully in cash, waiving this contingency is quite risky because it depends upon you being able to secure a mortgage in time to close in on the home. If you are unable to get a mortgage, you could be in a world of financial trouble. Therefore, you have to be confident you will not be in this situation before making this move.