As a home seller, when deciding to accept an offer on your home from a buyer make sure you understand the different contingencies the offer may have.
Contingencies are contractual items that must be met before the sale can be successfully completed. Most offers have at least one contingency.
Here are 5 typical contingencies you will find in a Florida sales contract:
- Home inspection contingency. This gives the buyer the right to have the home professionally inspected and request repairs by a certain date — typically within 10 to 15 days of the contract being signed. Most repair requests are negotiable, though, so you have the option to negotiate with the buyer which fixes you’re willing to make.
- Appraisal contingency. For a lender to approve the buyer’s mortgage, the home must pass an appraisal — a process during which the property’s value is assessed by a neutral third party. The appraisal verifies that the home is worth at least enough money to cover the price of the mortgage.
- Financing contingency. A financing contingency protects the buyer in the event their lender doesn’t approve their mortgage. The Florida As-Is contract has a 30-day financing contingency.
- Sale of current home contingency. Depending on the buyer’s financial situation, their offer may be contingent on the sale of their current home. This could delay your moving plans because the closing is dependent upon the closing of the buyers home.
- Title contingency. The lender will require a “clear title” — a process in which the title company reviews any potential easements or agreements that are on public record. This ensures the buyer is becoming the rightful owner of the property and the lender is protected from ownership claims over liens, fraudulent claims from previous owners, clerical problems in courthouse documents, or forged signatures.
Your agent should be able to guide you on any contingencies the offer you are considering has. If you have specific or technical questions you should consult a good real estate attorney.