Contingency! When you’re attempting to purchase or sell a home, this word will be the most important! I would like to give a brief description of some you will see and what to expect.
When I work with buyer’s I always attach an addendum to my contract’s. Addendum’s supersede the contract so that is where I place my buyer’s contingencies. That addendum states that “the contract is contingent on buyer’s sole approval of all inspections, financing and affordable insurance. In the event buyer is not satisfied this contract is considered null & void or re-negotiable and earnest monies will be returned.” This reiterates some items already placed in the contract but it’s always good to reinforce them. Take note that it has no dates and vague terms. An example is affordable insurance: What is affordable? When do you have to decide by? This addendum helps insure my buyer’s protection from the negotiations to closing.
What should the seller’s know? What do they do when they receive this addendum?
If I received an identical addendum and represented the seller, then I would advise that they counter the addendum. I would suggest adding date caps and removing the affordable insurance contingency. You want to make sure that this is a serious buyer whom is not wasting your valuable marketing time. The earnest money should suggest the seriousness of the buyer. Without risk of losing the earnest the buyer may not be as serious or motivated as others with their monies at risk. You as the seller can always refuse to sign a release but unless you have good reason, it is not wise. By countering the addendum it allows the buyer and seller to take equal amount of risk. The idea is to avoid situations where the buyer’s does not show up to the closing and the seller has made repairs and/or arrangements to move. Keep in mind the buyer usually takes possession on the day of closing so the seller is almost always packed up well before then.
I hope this article gave you some insight into the wonderful world of real estate. Please remember to always consult your local agent and do not use this article as advice solely for your transaction. Each real estate deal is unique. The real estate business is constantly changing and evolving. New laws appear and old ones may disappear. If you every have any questions about our local market please don’t hesitate to contact The Fred Holland Team!
Avg. Sales Price: $202000
Avg. Days on Market: 118
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