Home buying contingencies can make or break a sale or purchase. Which contingencies should you keep as a buyer? Let’s find out.
When you buy a home in NYC, it can be a daunting task that entails a lot of time and decision making before closing on your dream home.
This includes hunting for the perfect space in a neighborhood that fits your budget, deciding if you need a broker, putting in an offer, finding a real estate attorney, and deciding what contingencies you need. Once your offer is accepted, it’s time to conduct the home inspection.
We’re here to help you understand how to use contingencies to safeguard yourself as a buyer.
What is a contingency?
In simple terms, contingencies are conditions made by the buyer and seller that must be satisfied in order for the purchase of the house to occur. So if these contingencies or conditions are not satisfied, then either party can drop out of the transaction.
There are six common home buyer contingencies: home inspection, appraisal, mortgage, home sale, clear title, and financial. While all six contingencies are important, as a buyer you are able to waive them if you’d prefer. However, one contingency that should be kept is the home inspection.
The home inspection in the buying process
The home inspection contingency gives the buyer a certain period of time to have a home evaluated by a licensed inspector. Based on the findings, the buyer can either back out of the deal or continue moving forward with the transaction.
You (the buyer) are responsible for hiring and paying for an inspector. Knowing whether or not a potential property has problems can save you a lot of money in the long run, and even on negotiations in the buying process.
While some problems may be minor and only require low cost fixes, major repairs such as foundation issues, pest infestation, or electrical problems can be very expensive to repair. It’s better to know the exact condition of a property before you finalize your purchase.
Once you have your home inspection report findings, you have a few options at your disposal. These include making the necessary repairs yourself, negotiating with the seller, or withdrawing your offer on the home.
Using the inspection report to negotiate
While more extensive problems may mean you have to rescind your offer on the house, you can also try to negotiate with the seller if you are set on that property. For instance, you can ask them to make the needed repairs or even reduce the offer price.
Keep in mind that if the seller is unwilling to meet your conditions and negotiations, you are still able to rescind your offer with no penalty.
Homes to buy in New York City:
- 372 5 Avenue, #9N Garment District, New York ($475,000) – studio, 1 bath, 550 sqft
- 186 West 80 Street, #6E Upper West Side, New York ($575,000) – studio, 1 bath, 412 sqft
- 430 East 57 Street, #13D East Midtown, New York ($2,100,000) – 2 beds, 3 baths
- 570 Broome Street, #8B Hudson Square, New York ($3,425,000) – 3 beds, 3 baths, 1,539 sqft
For many, becoming a homeowner is a moment of great accomplishment. If you are looking to become a proud homeowner in New York City, Localize can help.