What are Contingencies in your home purchase?  Contingencies are clauses that are built into your contract that will help mitigate the damage if something goes wrong in your purchase.  They can help you to avoid losing your earnest money (the money you put forth to ensure that you were serious about purchase).  They also help you to build leverage, getting the seller to help you out if problems arise during the sale.  They don’t cover everything, but will cover most everything and are built to help the buyer.

Contingencies also are timing-based.  They have dates that they must be accomplished by.  If you have what’s called a “hard contingency”, you have to sign off physically that the condition has been met.  These are things like repairs, disclosures, inspections, loan approvals, appraisals, and final approval.  These are common to every loan, and won’t be questioned.  They’re really there to help both sides in the purchase.

Tier-two contingencies are what can make or break your sale.  These are the optional stuff that the sellers, in a market like today’s with low levels of inventory and high-demand, can say no to.  This list includes sale of the current home, homeowner’s insurance, homeowner’s associations, or keeping the current owner’s property that you like.

When creating your contingencies, you have to make sure that you are not going to annoy the current seller.  They hold the cards in a seller’s market.  You won’t be able to talk them into giving you a break on your purchase if they aren’t desperate to sell, so don’t overplay your hand.  Ask for what you need to be comfortable purchasing the home, of course, but they can move to another buyer if they feel that you are being unfair.

Call The Home Loan Expert Team in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515, Nashville at (615) 810-8555 or Birmingham, AL at (205)721-7656.  You can always apply online at hero.loan for your VA Loan, and www.thehomeloanexpert.com for your other mortgage needs, and we’re also open on Saturdays and will come to you to help close your loan. We work hard to make it easy on you.  Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?

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