A few weeks back, I provided Tucson home buyers with a closing checklist. Part of this checklist included completing any contingencies that were part of your home purchase agreement. Adding contingencies to a contract could slow down the sale. So, you need to keep them to a minimum. However, there are a few common contingencies that every Tucson home buyer should always consider adding to their purchase agreement to protect themselves.
Common Contingencies for Tucson Home Buyers
Home Inspection Contingency
One of the most common contingencies buyers include in their purchase agreement is a home inspection. Professional inspectors spot potential problems that might not have been easy to see while conducting your initial walkthrough. Make sure you show up for the inspection. And ask smart questions while the home inspector walks about. The results of their inspection could determine whether or not this Tucson home is worth the investment. With a home inspection contingency in place, you're covered if you decide to walk away.
Mortgage Financing Contingency
Another one of the most common contingencies buyers add to their purchase agreement is mortgage financing. Unless you're purchasing the property with all cash, you're going to need to be approved for a home loan. Unfortunately, sometimes home loans fall through during the escrow process. An issue might arise with your application after you've already put in an offer on a Tucson home. The mortgage financing contingency protects you if your loan is denied at any time.
Home Appraisal Contingency
Banks want to know that the Tucson home you're buying is worth at least what you're asking to borrow. If it isn't, then you'll need to come up with more money or ask for a reduction in the sale price. Otherwise, you might need to cancel your purchase agreement. Therefore, a home appraisal contingency is a must for all sales contracts.
Home Sale Contingency
Do you currently own a home that you need to sell in order to be approved for a new home loan? Most buyers do. That's why another one of the common contingencies we see is the home sale contingency. However, keep in mind that this type of contingency might work against the buyer, especially if you're in a seller's market. If at all possible, sell your current home before you start looking for another one. Sellers don't want to have to take their home off the market while you try to sell your current home. They might move on to a buyer that doesn't have a home sale contingency added to their sales contract.
Clear Title Contingency
Finally, you want to make sure to check that the title is clean and clear. The title shows the chain of ownership on a property. Your title company should review the title history as a matter of normal business. This also includes checking for liens or disputes against the property. You don't want to be held responsible for a previous owner's debt once you take over the ownership of the home. The clear title contingency allows you to resolve any issues before final sale.
When you add these common contingencies to your Tucson home purchase agreement, you'll be covered for these specific unforeseen circumstances that might arise. If any of these happen and you choose to walk away from the sale, you'll receive all your Earnest Money Deposit back. Talk to your Tucson real estate agent to determine which of these common contingencies works in your best interest before you enter into a sales contract.