Contingencies
When it comes to buying a property in Washington State, contingencies are an important aspect of the real estate offer process. Contingencies are clauses in the purchase and sale agreement that outline certain conditions that must be met in order for the sale to go through. These conditions are designed to protect the buyer and give them an "out" if certain circumstances arise. In this blog post, we'll explore the importance of contingencies and the different typical contingencies seen in sales of Washington State properties.
Importance of Contingencies
Contingencies are important because they protect buyers from unexpected issues that could arise during the real estate transaction. For example, a buyer may include a financing contingency in their offer that specifies that the sale is contingent on them securing a mortgage loan. This protects the buyer in case they are unable to secure financing for the property. Similarly, a buyer may include a home inspection contingency that allows them to cancel the sale if significant issues are discovered during the home inspection.
Without contingencies, buyers may be at risk of losing their earnest money or being forced to complete the sale even if they are no longer interested in the property. On the other hand, sellers may be more hesitant to accept an offer that does not include any contingencies, as this may put them at risk of the sale falling through due to unforeseen circumstances.
Typical Contingencies Seen in Washington State
While the specific contingencies included in a real estate offer can vary depending on the circumstances, there are some common contingencies seen in sales of Washington State properties:
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Financing Contingency: This contingency specifies that the sale is contingent on the buyer securing financing for the property. If the buyer is unable to secure financing, they may be able to cancel the sale without penalty.
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Home Inspection Contingency: This contingency allows the buyer to conduct a home inspection of the property and cancel the sale if significant issues are discovered. The buyer may also request repairs or modifications to the offer based on the findings of the inspection.
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Appraisal Contingency: This contingency allows the buyer to cancel the sale if the property is appraised for less than the purchase price. This is important because the lender will typically only approve a loan for the appraised value of the property.
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Title Contingency: This contingency allows the buyer to cancel the sale if there are any issues with the property's title, such as liens or easements. The buyer may also request that the seller clear up any title issues before the sale is completed.
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HOA Contingency: If the property is part of a homeowners association (HOA), this contingency allows the buyer to review the HOA documents and cancel the sale if they are not satisfied with the terms or rules of the association.
By including these contingencies in their offer, buyers can protect themselves and ensure a successful transaction. It's important to note that contingencies can also be negotiated between the buyer and seller, and may be modified or waived depending on the circumstances.
In conclusion, contingencies are an important aspect of the real estate offer process in Washington State. They protect buyers from unforeseen issues and give them a way out of the sale if certain conditions are not met. By understanding the different typical contingencies seen in sales of Washington State properties, buyers can make informed decisions and ensure a successful transaction.