Contingencies in Real Estate Contracts

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

When you get into contract to buy a home, there are some important contingencies to think about.

One is the inspection contingency. Most contracts have a 10-day due diligence period in Henderson, in which you do your inspections, you can do your preliminary title reports, and the seller sends over a form with any known defects on the property. This is basically your “get out of jail free card" where you can get out of the contract without penalty and get all your money back out of escrow, basically with no questions asked.

“

Inspection contingencies allow you 
to exit a home contract penalty-free

”

Another one we have here in Nevada is the five-day free look period for HOA packets that buyers receive from the sellers. The HOA tied to the home sends a packet of rules and regulations and alerts you to anything you wish you would’ve known before making the offer. A lot of people looking to invest in homes and rent them out are interested in these because some communities do not allow renters.

Another contingency is for home appraisal and loan approval. Every offer we put in is contingent upon whether or not the home appraises for the offered value. Sometimes we put in an offer and we’ll negotiate that the buyer will pay above appraisal because we’re in a competitive, multiple offer environment, but most of the time, the offer is contingent upon appraisal. The lender usually takes 30 to 45 days to get the full loan approval. Once that happens, then the lender is able to fund the loan, and the deal closes.

Another thing to think about with contingencies are the regular disclosures, like the seller’s real property disclosure form (SRPD). That’s a form you get during the 10-day due diligence period, in which the seller has to disclose any defects like a roof leak, whether or not the home belongs to an HOA, or anything nearby that affects that home’s value.

There are so many things to consider here, which is why it’s crucial to have an agent on your side who understands all the contingencies and the laws that govern them. If you have questions about this topic or anything related to real estate in our area, give me a call. I’d be happy to continue this conversation with you.