Is it Ever Safe to Waive Contingencies When You Buy a Home?
When you buy a home, there are a number of things that need to happen in order for the sale to be final. You need to have an agreement with the seller, get financing in place, and have the home inspected. In most cases, you would also waive your right to cancel the sale if something were to go wrong before closing. But is it ever safe to waive contingencies? This guide explains.
Is it Ever Safe to Waive Contingencies When You Buy a Home?
The three most common contingencies in real estate involve:
- The appraisal
- The home inspection
- Financing
Here's a closer look at each.
The Appraisal Contingency
The appraisal contingency protects the buyer in a situation where the home they are buying is appraised for less than the purchase price. If this happens, the buyer has the right to cancel the contract and get their earnest money back.
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The Home Inspection Contingency
The home inspection contingency protects the buyer by giving them the opportunity to have the home inspected before finalizing the purchase. If the inspection reveals any major problems with the home, the buyer can cancel the contract and get their earnest money back.
The Financing Contingency
The financing contingency protects the buyer in a situation where they are not able to get approved for a loan to purchase the home. If this happens, the buyer can cancel the contract and get their earnest money back.
Related: When is it a good idea to flip a house in Lakewood or Long Beach?
When is it Safe to Waive Contingencies?
In general, it is not recommended that buyers waive any of the above contingencies. However, there are some situations where it may be necessary.
For example, if you are buying a home in a highly competitive market, you may need to waive your contingencies in order to beat out other buyers. Or, if you have already been pre-approved for a loan and have the cash on hand to buy the home outright, you may feel comfortable waiving the financing contingency.
As always, it is important to speak with your real estate agent and loan officer to get their professional opinion before making any decisions.
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