Whether you’re buying a large farm near Lake City or a land-home combo in the same area, you’ll have a real estate purchase contract to seal the deal. Within that contract, you’ll most likely have contingencies—but what is a contingency, and why do you need them in your contract?
What is a Real Estate Contingency?
A contingency in a real estate contract is a condition that must be met (by either the buyer or the seller) in order for the transaction to go through.
Common Real Estate Contingencies
Some of the most common real estate contingencies involve mortgage approval, appraisals, and home inspections.
Mortgage Approval Contingency
Having a mortgage approval contingency in your contract protects you in case you can’t obtain financing to buy the home. If you can’t get a mortgage, you’re off the hook; you can walk away from the deal without losing your earnest money deposit.
Home Appraisal Contingency
When you borrow money from a lender to buy a home, you’ll need to have the home appraised. The lender will hire an appraiser, and he or she will value the house based on its current condition in the current market. If the appraisal comes back lower than the asking price, your lender is likely to pull their loan approval; they don’t want to lose money. Having an appraisal contingency in your contract lets you leave the deal if the appraisal comes back low.
Home Inspection Contingency
If the home inspection turns up issues, you can ask the seller to fix them, take some money off the asking price, or walk away from the transaction if you have a home inspection contingency in your contract.
Are You Buying a Home in Lake City or the Surrounding Communities?
We’d love to help you find your dream home here. Call us at 386-243-0124 or get in touch with us online to let us know what you’re looking for so we can start searching right away.
In the meantime, take some time to explore:
- Waterfront Residential
- Waterfront Land
- Bank Owned & Foreclosures
- Short Sales
- Paved Road Frontage
- Non Deed Restricted Land
- Wooded Oak Tree Land
- Land for Land Home Combo