Once you’ve found your dream home, you might be tempted to do everything possible to make your offer stand out. Aside from making a high offer, some buyers are removing contingencies, which is risky. A contingency is an essential condition that must be met to complete the sale. Contingencies are there for your protection. You should never remove these contingencies when buying a home without knowing exactly what you will be giving up.
Contingencies are put in place to protect the buyer. If you remove certain contingencies, you take risks that could cost you money. The home inspection contingency is one that you should not remove. The inspection is done by a neutral inspector who will inspect the entire home, including electrical, plumbing, and the home’s structure.
If you remove this contingency, you have no recourse if problems with the house are discovered after you’ve signed the papers. The responsibility for repairs is yours, not the seller’s. After the inspection is completed, the buyer can then decide if they want the seller to address the problems or not.
If you wave the appraisal, you are committed to paying the contract price or agreed-upon price, whether or not the lender agrees to the loan. If you waive the appraisal, you might have to pay the difference yourself for the house you have under contract.
The only time you can waive this contingency is when you have the financial resources to cover the gap. If you keep this contingency, getting a low appraisal can create an opportunity to negotiate with the seller, reducing additional expenses and saving the sale.
Septic System Inspection
If you live in a major city, you might not be aware of this contingency. But if you decide to move to an area with well water and septic tanks, you need this contingency. For example, if you’re looking for homes for sale in Lakeland to retire, your new home might have a septic tank.
This contingency should never be waived since a septic tank is important for your health and a vital part of the property. This is the water you’ll be bathing and cooking in, not to mention drinking. Repairs to a septic system can cost thousands of dollars.
The financing or loan contingency protects the buyer’s deposit if they fail to get the financing for the house. This contingency ensures that you should get your deposit back if, for some reason, you do not get the loan or mortgage you were expecting. The only time you do not need this contingency is if you pay cash or already have secure financing.
If the initial inspection finds a mold problem, a second mold inspection should be done by a mold specialist to determine the seriousness of the mold. Not all buyers take mold seriously. But mold can be a serious health hazard that can get worse as time goes by, and it is expensive to remediate.
These contingencies are in place to protect the buyer and should not be removed. Only remove these contingencies when you’re sure that you understand what you are giving up by removing the contingency.