If you've ever bought or sold a house, you may have experienced confusion over all of the terminology involved in the process. Real estate contracts are full of legal jargon that can be hard to understand, especially if it's your first time buying or selling.
One important term to know? Contingencies.
Robert Garcia, Realtor® and our Director of Operations, explains this term and why it's important when it comes to real estate transactions.
In general, the word contingent means "occurring or existing only if (certain circumstances) are the case" (Oxford). Investopedia explains it in regards to real estate: it's “a condition or action that must be met for a real estate contract to become binding." Essentially, contingencies are a sort of safeguard that protect you against unforeseen events.
Let's say you're in the process of buying a home. In the contract, you include a contingency for a home inspection. If the home inspection report comes back with undesirable results, the contingency allows you to have several options. Instead of being stuck in a binding agreement, you can now renegotiate some of the items found in the inspection report or back out of the contract altogether.
Contingencies essentially allow you an exit out of a binding legal agreement, so you can move on to a different home purchase that is better for you. Homebuyers should know how to use contingencies to their advantage.
However, with homes selling quickly in the current market, including contingencies in your contract may be a little more complicated than usual because some buyers may be willing to waive contingencies.
So then how do you write a competitive offer while incorporating contingencies? The agents of the Eric Stewart Group of Long & Foster can help. Our agents will coach you through the process of writing the strongest offers in the midst of a very competitive market. If you’re ready to beat the competition with an incredible offer, head to our Listing Page to find available homes and get into contact with one of our experienced agents!