This Is How Contingencies Help First-Time Buyers

September 23rd, 2019 by Heritage Realty International Inc.

Contingencies for First-Time Buyers

Our real estate agents are hard at work showing customers like you the best Morgantown homes for sale. There are homes in our market to meet virtually any budget or lifestyle. Many of them go to first-time homebuyers.

Looking for your first home can be a complex process, but it's worth it.

In all your thoughts about the best neighborhoods, home amenities, job opportunities, and school districts, the details of real estate contracts may not have crossed your mind yet. But there is one thing you should know about early on: contingencies.

What Are Contingencies and Why Do They Matter to First-Time Buyers?

Contingencies are clauses in your real estate contract that protect your interests.

A contingency clause exclusively benefits a prospective buyer, not the seller. Contingencies allow buyers to walk away from a pending real estate transaction without penalty if adverse events reduce the expected value of the home, increase its cost, or introduce complications.

You can have zero contingencies, one, or several, and each one is linked to a certain condition. If any of those conditions are met, you have the opportunity to exit the transaction. This means you have built-in protection against both unscrupulous sellers and the unknown.

In general, sellers will be less enthusiastic about offers that come with many contingencies. That said, some contingencies are very common—so don't feel like you have to use none at all. Your real estate agent will advise you on the best strategy for you.

What Are the Important Contingencies First-Time Buyers Should Know?

Naturally, your first home-buying experience is usually the most challenging one. You'll learn many things in the process. Contingencies help ensure those "lessons learned" don't come at too high a price—by keeping you from losing time and money

Some of the most important contingencies for first-time buyers include:

Home Inspection Contingency
A home inspection contingency allows the purchase of a home to depend on results of an inspection of the property by a qualified inspector. This is an effective way to terminate a transaction if there are major electrical, plumbing, or other issues.
Home Value Contingency
The home value or property appraisal contingency is valuable in a fast-paced, appreciating market. It protects you from a situation where the home's appraised value is too high or too low. In situations where appraised value does not match with your financing plan, you would usually have to renegotiate your mortgage package.
Insurability and Natural Disaster Contingencies
These two potential contingencies are closely related. A natural disaster contingency will protect you if you learn, during mandatory seller disclosures, that a home is subject to disasters such as floods or earthquakes. Such disasters—as well as other conditions—can affect whether or not a home can be insured. The property's insurability can be the subject of a separate contingency.

All in all, contingencies are an essential part of your home-buying toolkit. Using them wisely is one part of succeeding in your goals—and the right real estate agent will help you do that.

Heritage Real Estate is the team to talk to if you are searching for your perfect first home. Our experienced agents will give you the advice and resources you need to make informed choices. Contact us to find out more today.

Categories: Buy a House

Tags: Heritage Realty International Inc., First-time buyers, Homebuying tips, For buyers, Contingencies