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Learning About Contingencies in Home Buying Contracts
Home Home Real Estate
By: Ben Howard Email Article
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It's essential for home buyers to understand the contingencies involved in home buying contracts as well as contingencies that they should include in their offer in order to ensure a more transparent turnover of the home. For example, if a family is aiming to buy Encinitas real estate and are shopping around Encinitas homes for sale and they encounter a seller who is willing to sell his home but has a contingency in the seller's contract, then it's worth looking into what this contingency means. If the contingency includes the provision that the seller will only sell the house if he is able to buy the home that he is aiming to buy at the moment, then this would definitely change your timetable as a buyer in a big way.

From the point of view of the seller in the example, the contingency was included to protect his interest. He wouldn't want to be homeless if he sold the house without being able to move into a new house of his choice. As a buyer, you can protect yourself by setting a time limit on this.

In many cases, setting a contingency for yourself will protect your interests in turn so that the negotiations will not be one-sided. After all, buying a home is serious business and it wouldn't help you if you end up catering to other people's conditions at the detriment of your own interest. It's a far cry from buying furniture which you can return if it doesn't meet your expectations. It will also shape your life in the following years because you will have to adjust your finances to accommodate the mortgage for a long period of time. Learning which contingencies to include in your offer will be invaluable for you.

One example of a contingency that you can set is that the deal will only go through if you get a positive report from the house inspectors that you will hire regarding the physical condition of the house. Getting a house inspection and including this in the contingency of your offer is very important because a lot of money could go to repairing a poorly-maintained house and this additional financial burden could prove to be too burdensome for you. This could cost you a lot of money so you have the right to pull out of the negotiations in case you uncover these things.

Another possible contingency you can include is that you will only go through with the closing of the house if you can verify that the house is insurable. It's very unfortunate that some people find themselves stuck with a house that they paid for and will be paying for for the years to come only to find out that, for one reason or another, it is uninsurable. You can find out whether your prospective house sits on an earthquake-prone area, or if the house is exposed to environmental risks such as dangerous levels of toxicity through having it inspected.

Another contingency you can consider is that if you discover some things that need to be repaired, you will only go on with closing the deal if the seller will shoulder the repair costs or have it fixed before you sign anything else. An example is if you find an issue with the electrical circuits of the house and you want to come to an agreement with the owner that you will only complete the sale if this fire hazard is properly dealt with first.

Ben Howard is a writer specializing in real estate properties and other related topics. Visit our website for more information about Encinitas homes for sale and to look at Encinitas real estate listings.

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