Last week, I talked about common contingencies to ask for when buying a home. I recommend including these in your typical sales contract. However, there are times when it is OK to waive contingencies. This works in a buyer’s favor when they wish to stand out among other buyers. And even though the Westfield area real estate market appears to be starting to level out a bit, it still favors the seller. So, keep these situations in mind when crafting your offer.
When Is It OK to Waive Contingencies?
If you need to borrow money to finance your new Westfield area home, you might want to include a finance contingency (aka “mortgage contingency”). This allows you a specified amount of time to complete the loan process. But, if you pay for your home in cash, this is one contingency you can feel confident waiving.
For most real estate transactions, I recommend including an inspection contingency (aka “due diligence contingency”), even on a newly constructed home. However, when looking at a shared structure (like this Downtown Westfield condo), you might be able to skip it. Just check with the homeowner’s association to see what parts of the structure they cover for repairs (such as the roof, foundation, etc.) and which areas the homeowner is responsible for before you submit your offer. If you have any questions, talk to your REALTOR® or the HOA.
Many buyers desire to move in as soon as they sign their closing paperwork. But if you can afford to wait a little while, you might want to waive your right-to-possess contingency. This works well if the seller needs a little time to find a new place to move into. It not only relieves a bit of stress for the seller, but it also makes your offer stand out from any others.
Home Sale Contingency
The final scenario where you might want to waive contingencies involves your home sale. Actually, there are two ways this may work. First, sell your home and move into a temporary rental before looking for a new place. Then, there is no home sale to worry about. Or, second (if you can afford it), consider carrying two mortgages temporarily until you sell your first home. If you cannot afford the two mortgages or if you need to sell your first home in order to fund the second, then you definitely need to add the home sale contingency. Otherwise, you run the risk of losing your earnest money deposit.
Scott Gleason, CRS at Coldwell Banker Realty – East, NJ Luxury Homes