Purchasing your new home in an Orlando neighborhood can be an exciting time for you. Still, you want to be sure your dream home does not turn out to be a nightmare. That is why you should consider putting in a number of contingencies as part of your real estate contract.
As Forbes explains, a real estate contingency permits you to back out of a sale even after you have placed a bid and have made an earnest money deposit. It also allows you to get your deposit back. Contingencies can help you in a number of situations that might cause you to rethink your purchase.
With a title search, you can learn about the ownership record of the home you want to buy, as well as discover liens or judgments that might exist on the property. However, a title search might not find everything you need to know before you place a bid on the home. With a title contingency, you can walk away from the purchase if you learn about a debt or an ownership dispute that you do not want to deal with.
You may want a full inspection of the home before you buy it. However, in the event an inspection report is not available at the time you make your bid, you can utilize an inspection contingency. If you should find out that the home has problems, you can negotiate with the seller about how to fix them. If you feel you will end up on the hook for expensive home repairs, the inspection contingency lets you back out of the deal.
Having a financial contingency may help you if you want to use a mortgage to purchase the home. You might only have preapproval for a loan but have not undergone the underwriting process yet. A financier can still deny you a loan during the underwriting stage. With a financial contingency, you can leave a sale if a bank denies you a loan and you cannot find another way to finance your purchase.
Home sale concerns
You may be in a situation where you want to buy a new home but you do not have a buyer for the home you live in right now. You may not want to go ahead with a purchase until you know someone will buy your current home, so you include a home sale contingency. This gives you a specified time to sell off your current home. If the time runs out and you have not found a buyer, you can walk away from the sale.