A few days ago, this article on the front page of the Wall Street Journal caught my attention. All over the US homes have been selling quickly. In many cases it took less than a week from list to contract.
It has become increasingly difficult to compete in this hot seller’s market. To put the odds in their favor many buyers consider waiving contingencies.
Purchase Contract Risk
Our standard real estate purchase contract is very buyer friendly. There are numerous clauses that allow you to walk away from a purchase without losing any money.
While contingencies give you a way out, they create additional risk for the seller. That’s why sellers prefer offers where the buyer can’t bail.
Here are 3 contingencies you could waive to make your offer more competitive.
Financing
Only waive the financing contingency if you have enough cash in the bank to buy without a loan. To stay competitive, submit a full loan approval with your offer instead of a simple pre-approval letter.
Appraisal
In the past six months many buyers were forced to offer above list price due to bidding wars.
Our purchase contract has an appraisal contingency, which means you can get out or renegotiate if the home does not appraise.
You could waive the appraisal contingency and show proof that you have sufficient funds to cover the difference.
Home Inspections
Only waive inspections if you are an experienced buyer, or on a new or recently remodeled home.
Instead of waiving inspections, waive remedies. You agree to not ask the seller for repairs, however, you will still be able to terminate the contract if the inspections are not satisfactory.
What If You Default on a Contract?
You are probably wondering what happens if you default on a contract, because you waived all contingencies, but still need to get out.
This is a legal question, so definitely consult your attorney before you cancel the contract.
In the best case you will lose your earnest money deposit.
In the worst case the seller will take you to court and sue for performance. At the minimum they will try to recover any losses they incurred.
Always work with an experienced buyer’s agent who can help you assess the risk when you waive contingencies in your offer.
Call or Text me TODAY at (614) 975-9650! I can help you write winning offers without risky terms!