David Reecher: Contingencies in a Real Estate transaction

1. What are contingencies in a Real Estate transaction, and how can you use them to your advantage? And why not understanding them fully can cost you big time! By David Reecher, The Rapid Results Team at eXp Realty What are contingencies in a Real Estate transaction, and how can you use them to your advantage? And why not understanding them fully can cost you big time! This is where a buyer has made an offer on a home and the seller has accepted it, but the finalized sale is contingent upon certain criteria being met. This criteria, or contingencies, typically fall under four major categories: appraisal, loan approval, inspections and, reports and disclosures which would include HOA or condo disclosure, if applicable. The buyer will have the time to do their due diligence in all of these areas. Regarding inspections…. in Maryland, the typical inspections include a structural and mechanical home inspection of the entire house, as well as a wood destroying insect inspection to make sure there are no termites. If the home has a well and or septic system, you will absolutely want to add those inspections too. From here, you can also add a chimney inspection if the house has a chimney, Radon, mold, lead base paint and other environmental inspections if you so desire. For seller disclosures, these encompass full disclosure on both inside and outside of anything and everything to do with the home. In regards to reports, these can include any title, State and local reports as well as HOA or Condo reports and disclosures that the buyer will have ample time to review during the contingency timeframe. The contingency timeframes are agreed upon in the initial contract and in most cases are typically between 7 and 25 days, depending on the type of contingency. Once the contingency time frame expires, your deposit will be at risk, so be sure not to remove them until you know you’re o.k. w/ all of the aspects of the home. You can ask for an extension if you need more time. Once all contingencies are removed, you have much more assurance that the home will close. David Reecher and the Rapid Results Team at eXp Realty can be reached at 443-623-2565, david.reecher@exprealty.com