"What are buyer contingencies, and how can they affect your sale?"
What Are Buyer Contingencies?
Buyer contingencies are conditions included in a purchase offer that must be met for the sale to move forward. If these conditions aren’t satisfied, the buyer can legally walk away without penalties.
Common Types of Contingencies:
- Inspection Contingency:
Buyers can request a professional home inspection to uncover potential issues with the property.- Seller Tip: Prepare by addressing visible repairs beforehand.
- Appraisal Contingency:
This ensures the home’s appraised value matches or exceeds the sale price.- Seller Tip: Set a realistic price based on market data to avoid surprises.
- Financing Contingency:
Protects the buyer if their mortgage application is denied.- Seller Tip: Request pre-approval letters with offers.
- Home Sale Contingency:
The buyer’s purchase depends on selling their current home first.- Seller Tip: Evaluate how this might delay your timeline.
Why Contingencies Matter to Sellers
Contingencies add complexity to a deal, but understanding them can empower you to negotiate better terms:
- Increased Risk of Delays: Some contingencies can extend closing timelines.
- Potential to Lose Other Offers: Buyers backing out means starting over with new prospects.
How to Minimize Risk:
- Attract pre-approved buyers with clean offers.
- Be proactive in resolving issues (e.g., completing inspections ahead of listing).
- Consider a backup offer to maintain leverage.
Negotiating Contingencies
When reviewing offers, you have the option to:
- Accept the Contingency: When terms are reasonable and manageable.
- Counteroffer: Adjust terms to reduce risks, such as shortening contingency periods.
- Reject the Contingency: If the risk outweighs the benefits.
Seller Strategy:
Leverage the competitive Burbank market by focusing on offers with fewer contingencies or negotiating for stronger terms.
Working with a Realtor®
As your trusted Burbank real estate expert, I can help you:
- Understand contingency clauses in offers.
- Strategize on negotiation tactics.
- Mitigate risks while securing the best deal.
Conclusion
Buyer contingencies don’t have to derail your home sale. With the right preparation and expert guidance, you can confidently navigate these conditions and achieve a successful transaction. If you’re ready to sell your home in Burbank or have questions about contingencies, contact me today. Let’s work together to make your selling experience seamless and profitable!