Home buying contingencies can make or break a sale and purchase…literally. So what 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 home 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, deciding what contingencies you need. Once your offer is accepted, it’s time for conducting a home inspection, reviewing and signing the contract, pay the down payment, submit a mortgage application, scheduling and attending the closing.
While this process can become more complicated, it is important to understand each step before jumping in. We’re here to help you understand one part of the process and how you can use it to safeguard yourself as a buyer.
What contingency to keep when buying a home
First off, what are contingencies in real estate transactions and how does it affect you as a buyer? Contingencies are there to help protect both home buyers and sellers.
In simple terms, they 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.
Additionally, what contingencies are there in the home buying contract and which ones should you keep?
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 to. However, one contingency that would be better to keep would be 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 inspection done by a licensed home inspector. Based on the findings, the buyer can either back out of the deal or continue moving forward with the transaction.
So how to inspect a home? 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 fixes you are willing to do, larger issues such as foundation issues, pest infestation, or electrical problems can be expensive or harder to fix. 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. This includes making the necessary repairs yourself, negotiating with the seller, or withdrawing your offer on the home.
Negotiating your home inspection report
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
or many, becoming a homeowner is an accomplishing moment. If you are looking to become a proud homeowner in New York City, Localize is a great resource at your disposal.