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Should You Waive Your Contingencies When Buying a Home?

When you are buying a home, one of the decisions you'll have to make is whether or not to waive your contingencies. What are contingencies? They are clauses in an offer that allow you to back out of the deal for a specific reason.

For example, you might have a contingency that states the sale is contingent on the home passing inspection. If it doesn't pass, you can back out of the deal without any penalties.

There are different types of contingencies, and each one has its own risks and benefits. In this blog post, we will discuss what it means to waive your contingencies and whether or not it is a good idea for first-time homebuyers.

In a competitive market, sellers will often ask for buyers to waive their contingencies. This means that the buyer is agreeing to purchase the home without certain conditions.

When considering whether you should waive any contingencies, think it through carefully. Try not to act on emotion and risk serious financial issues by waiving something that stands between your dream home purchase--but be aware of all potential risks before making this decision!

Common types of contingencies:

Although you can make a contingency out of anything there are a few that you find very common in real estate deals:

-Appraisal contingency: This contingency protects the buyer in case the home is appraised for less than the agreed-upon purchase price.

-Inspection contingency: As a buyer, this is one of the most important contingencies to have. It protects you in case there are any major problems with the home that were not disclosed by the seller.

-Financing contingency: This contingency protects the buyer in case they are not able to get financing for the home.

-Sale of current home contingency: This contingency is used when the buyer needs to sell their current home in order to buy the new one. It protects the buyer in case their current home does not sell.

It can be risky waving any of the above, but there are times, as a buyer, you might want to waive them.

In order to do that, let's learn more about the contingencies in greater detail.

Waving a home appraisal contingency:

If you are looking at a home that is in a hot market and receiving multiple offers, the seller might ask you to waive your appraisal contingency.

An appraisal contingency protects you in case the home is appraised for less than the agreed-upon purchase price.

The main reason a seller would ask for this contingency to be waived is because they want to be sure that the sale will go through and they don't want to waste time with a buyer who might back out of the deal if the home doesn't appraise for the agreed-upon price.

If you are considering waiving this contingency, make sure you have done your research on the home and you are confident that it is worth the asking price.

You should also get a pre-approval from a lender so you have an idea of how much money you will be able to borrow. This will give you a good idea of what price range you should be looking in and help you avoid overpaying for a home.

Waving an inspection contingency:

An inspection contingency protects you in case there are any major problems with the home that were not disclosed by the seller. We don't recommend doing this if you do not have any prior knowledge of how the home was (or was not) maintained.

If you are considering waiving this contingency, then you should consider having a pre-inspection to ensure there aren't any serious problems with the home. If the inspector goes through the home and doesn't find any major problems, then you can feel more confident about waiving this contingency.

You should also make sure that you are familiar with your state's disclosure laws. In some states, sellers are required to disclose certain information about the home, such as whether or not it has ever had water damage.

Overall waving an inspection contingency is very appealing to the seller but could be very risky for you, the buyer. That's why it's important to know what you're getting into before you make this decision.

Waving a financing contingency

A financing contingency protects you in case you are not able to get financing for the home.

If you are considering waiving this contingency, then you should be confident that you will be able to get a loan for the purchase price of the home or have other ways to fund the purchase.

One way to be confident in waving your financing contingency is to work with a mortgage broker to get a pre-approval from a lender. A pre-approval is not a commitment to lend and your rate and payment won't be locked until you find a property that appraises.

Another way to be confident in waving your financing contingency is if you are paying for the home with cash. If you have the cash on hand to pay for the home, then you will not need to get a loan and can therefore waive this contingency.

Waving a sale of current home contingency

This contingency is used when the buyer needs to sell their current home in order to buy the new one. It protects the buyer in case their current home does not sell.

If you are considering waiving this contingency, then you should be confident that your current home will sell within the timeframe that you need it to. Currently, the market is so hot that most sellers won't consider a deal that still has this contingency.

Conclusion

As you can see, there are several different contingencies that you can waive when making an offer on a home. It's important to understand what each one of these means and how it will affect your ability to purchase the home.

You should only waive a contingency if you are confident that you will still be able to purchase the home without it.

If you have any questions about whether or not you should waive a contingency, then please reach out to us and we would be happy to help!

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