In today’s competitive housing market it has become common practice for buyers to waive contingencies when they submit an offer.
Here are my thoughts on which contingencies you may consider waiving, and when you definitely should not waive them.
3 Contract Contingencies Protect Buyers
Our standard purchase contract – published by the Columbus Association of Realtors and reviewed by the Columbus Bar Association – is very buyer friendly.
There are three contingencies that allow you to terminate your purchase offer without losing the earnest money deposit:
- home inspection: you can terminate for an unsatisfactory inspection
- appraisal: terminate if the home does not appraise at contract price
- financing: terminate if financing falls through
The Difference between Inspections & Remedy Contingencies
Some buyers confuse the Home Inspection Contingency with waiving Remedies.
The Home Inspection Contingency gives you the right to terminate the contract if you are not satisfied with the inspection.
This is the most common reason contracts get cancelled. Sellers hate it, because you can terminate for anything you don’t like in the inspection report.
Remedies, on the other hand, are repairs you request from the seller after the inspection. If you don’t come to an agreement on remedies you can cancel the contract, too.
In today’s competitive market most sellers don’t want to deal with remedies. They prefer to sell as-is or reduce the purchase price.
Should You Waive Inspections?
That depends on the condition of the house. In general, I DO NOT recommend you waive inspections. However, it may be prudent to agree to buy the house as-is and not request remedies.
In some rare cases it makes sense to waive inspections to be more competitive, for example, if you are buying a newer or recently remodeled house.
It’s always YOUR choice. You need to feel comfortable taking the risk.
What About Financing and Appraisal?
You should waive the Financing Contingency only if you are buying the house all cash.
Waiving the Appraisal Contingency is okay if you have funds to cover any shortfall.
Your lender will base the loan amount on the appraised value. If the appraisal comes in low, you need to cover the difference in cash.
You Can Trust that I Have Your Back
As your Realtor I will always have your back. I will give you my honest, professional opinion on the risks you take if you waive contingencies.
Check out one of my new listings in Upper Albany West, not far from the location of the planned Intel facility.
This home is in top condition and I expect buyers will waive contingencies when they write an offer!
It’s not too early to start house hunting!
Call or Text me TODAY at (614) 975-9650!