When you put down a large deposit on a house, there are many steps involved before you actually close on the property. There are appraisal and financing contingencies, inspection contingencies and contingencies for all parties involved in the transaction to satisfy. This article will help you understand the process of buying a house, including what happens during the inspection, appraisal and financing contingencies. Read on for more information about what comes next after you have submitted an offer and how to make sure you are ready to buy before you lose your chance!
Why do you need to close quickly?
If you are buying a house, you want to close as quickly as possible. Real estate agents will advise you of any special conditions or contingencies related to the sale. While these aren’t exactly red flags, they do mean that something outside of your control might prevent you from closing on the purchase. If the seller submits an offer on another house before yours is accepted, or if there is a problem with the appraisal, your deal might not close on time. To make sure that doesn’t happen, you need to be aware of all contingencies ahead of time and have a contingency plan in place if one is triggered. For example, if the appraisal comes in $100,000 lower than the purchase price, you might decide to put in more money to close the deal at a later date.
What happens during an inspection contingency?
During the inspection contingency period, the home will not be “inspected” in the traditional sense of the word. Instead, the seller will agree to pay for a home inspection. This inspection will be performed by a qualified inspector who will check the home for compliance with state and local codes, as well as any potential health hazards. The seller may also be required to complete certain repairs and upgrades before the inspection period ends. For example, if the HVAC system in the home is much older than code and in need of replacement, the seller might be required to make this repair before the inspection contingency expires. The inspector will then come in after the repairs have been completed and issue a report about whether the repairs have been done properly and to code. If they have not been done properly or if they are not up to code, the inspector will issue a repair order that the seller will need to fix.
What happens if the appraisal contingency is not met?
If the appraisal contingency is not met, the deal is off. The seller may choose to terminate the contract, or you may decide to walk away from the deal, depending on what the appraisal contingency agreement says. If the appraisal comes in higher than the purchase price, the seller will most likely terminate the contract and look for another buyer. If the appraisal comes in lower than the purchase price, you will have an opportunity to re-negotiate the deal. You will need to decide if you want to lower your offer so that it matches the appraisal amount. If you decide to lower your offer, you will need to re-submit your offer to the seller.
What happens if the appraisal contingency is met?
If the appraisal contingency is met, the appraisal will be accepted by the seller and the seller will be required to send you the appraisal. You will then have a set amount of time to decide if you want to proceed with the purchase. If you want to proceed with the purchase, the appraisal contingency period will end, and you will have to close on the deal within a certain number of days. If you want to reject the deal based on the appraisal, you will need to let the seller know. The seller will then have a certain amount of time to find another buyer.
What happens if the financing contingency is not met?
The financing contingency is a condition that must be met before the sale can proceed. This means that the financing must be approved, or the loan in escrow must close. If the financing contingency is not met, the deal is off, and the seller will have the option to terminate the contract. It may take a few weeks before you receive notice that the financing contingency has not been met, so you should be aware that you might not have any time left to continue with the purchase. If the financing contingency is not met, you will need to decide if you want to lower your offer. If you decide to lower your offer, you will need to re-submit your offer to the seller.
Key Takeaway
The process of buying a house is complicated, and there are many contingencies that must be met before you can close on the purchase. If one of these contingencies isn’t met, the deal will be off, and you will need to decide if you want to lower your offer or walk away from the deal. You should be aware of these contingencies and have a contingency plan in place in case one is triggered. While the above information may seem scary, it does not happen often and is usually followed by other offers on the property.