House hunting can be an arduous process. Like many other Tennessee homebuyers, you may look at dozens of houses before finding the one that you want. Once you do, you may be excited and anxious to get the deal closed so that you can move into your new home.
More than likely, you were told that several crucial steps must take place before the deal can close. One of the first critical steps in any real estate transaction is the completion of the purchase and sale contract. The contingencies you put into this agreement could get you into your new home without issue or could leave you with a home you don’t really want.
Why are contingencies so important?
In order to understand why contingencies are so crucial to your home purchase, you may need a short explanation of what they are. These provisions outline certain events that must occur in order for you and the seller to complete the transaction. If these events fail to happen, you can usually back out of the deal legally without any repercussions. Typical contingencies include the following:
- You must receive approval of your mortgage loan from your lender.
- The property must pass a termite inspection and home inspection.
- You and the seller must agree on a closing date.
- You and the seller delineate who pays what closing costs.
- Your home must sell before the deal can close.
These are not the only contingencies that you can request in your contract. You can make other requests, but if the seller has other offers on the home, he or she may not want to deal with numerous contingencies. You need to weigh your desire to purchase this particular home against your desire for more contingencies.
Of course, you shouldn’t give up certain contingencies just to get into the home, and you may want to remain wary of a seller that does not agree to a satisfactory termite or home inspection. You would not want to end up with a home that needs substantial repairs or you cannot afford because you failed to include the proper contingencies.
Don’t make these decisions alone
Buying a home could represent the largest purchase you will ever make, so you want it to go well. If you aren’t sure what contingencies you need in order to make sure you protect your rights through the buying process, it makes sense to take advantage of the legal resources in your area.