When buying a home, it’s important to think about all the contingencies – things that might not happen but could still affect your property. Things like natural disasters, financial market crashes, and power outages are all common occurrences that can have serious consequences. That’s why it’s important to have a home buy agreement that covers all the bases.
What are contingencies?
Contingencies are essential aspects of home buying that everyone should understand. These can include a home inspection, getting your lender pre-approved, and having enough money to close on the home. Contingencies ensure everything goes as planned and help protect both you and your buyer in case something unexpected happens.
Why contingencies are essential for buyers
If anything goes wrong with your purchase – whether it’s an issue with the home itself or something else out of your control – you have someone else waiting to step in and buy it from you. This is a protective measure designed to ensure that your home doesn’t fall into someone else’s hands who may not have your best interests at heart.
Types of contingencies
When it comes to home buying, there are a few key types of contingencies that you’ll likely encounter. The most common is the home inspection contingency. This requires that a qualified inspector inspect your home before closing in case any defects need to be fixed.
Other common contingencies include pre-approval from your lender and having enough money available for the down payment and closing costs. These steps ensure that you have all of the necessary documentation ready so you can close your new home as quickly and efficiently as possible. No matter which side of the home buying spectrum you’re on, it’s always important to have contingencies in place to protect your investment. By knowing what they are and having them set up beforehand, you can rest easy knowing that everything will go smoothly during the buying process.
Why contingencies are important
You might be thinking, “Why contingencies? What’s the big deal?” Contingencies are just insurance policies your homebuyer can buy to protect themselves in case something goes wrong with their purchase.
For example, if you’re buying a home and receive an offer within a specific timeframe, but your credit score is not good enough, your lender may require that you buy an insurance policy called a contingency. This policy would reimburse you for any money you have to spend on repairs or replacements because of problems with your credit history.
Contingency plans also come in handy if your homebuyer changes their mind about buying a home. For example, you buy a home, and your lender requires that you put 20% down. But after your homebuyer sees the house, they decide they don’t want to buy it. In this case, your contingency plan would reimburse you for the money you already spent on the house (20%). Fortunately, contingency plans are relatively common in home-buying, and several options are usually available. So feel free to ask your lender or real estate agent about them.
When should you put contingencies in your home buy agreement?
Contingencies are often included in home buy agreements for several reasons. If a deal falls through, both parties can be protected financially. If one party cannot move into the home as agreed upon, they’re still covered by the contingency. And finally, contingencies give buyers peace of mind that they won’t need to roll their possessions or take on any extra expenses if they have to back out of a purchase right before closing due to unforeseen circumstances.
When drafting your home buy agreement, make sure you include contingencies for common situations such as:
-Illness or injury of any party
-Builder going out of business
-Natural disasters like a hurricane or tornado
-Change of ownership or zoning regulations
List your contingencies in terms that your party agrees to, such as dollar amount and time frame. Ensure all parties are on the same page before signing your home buy agreement.
At We Buy Your Home Hawaii, we understand that contingencies can add an extra layer of security to your home purchase. Our Hawaii home buys agreements include a variety of contingency provisions ensuring that we’re always protected in the event something goes wrong. For more information on our Hawaii buy-home agreement services, please visit us online or call us today!