Contingency, continued...

Last week, we explored the ins and outs of title contingency. Now, let’s talk about loan contingency and what it means for buyers — and sellers.

CHIC (Pearl)

Loan contingency is a clause that allows a buyer to cancel their home purchase contract without penalty and receive a refund of their earnest money deposit in the event they're unable to secure a mortgage. Like any contingency, this clause could make an offer less desirable to a seller entertaining multiple offers. But it may be necessary to avoid serious financial risk up to and including legal action or being forced to buy the property.

GEEK (Kevin)

Sounds like a catchy clause, and it may not be all that necessary. Our job as realtors is to provide you with a choice of high-quality lenders who will do their homework and ensure that your loan will be approved before it’s sent to underwriters. At the end of the day, it benefits the lender to ensure that you’re in a strong, lendable financial position headed into the offer process. We’ll explore this more under appraisal contingency in a future post.

Chic vs. Geek: Buying from a Builder

Are you thinking of buying a new construction project directly from the builder? Here are some things you need to know before you sign the contract...

CHIC (PEARL)

We know what you’re thinking: Buying a brand new home sounds like a dream. No creaky floors, no skeletons in the closet, and no surprises in the crawlspace. But you can’t judge a book by its cover. Just like old homes, new constructions come with their own set of potential pitfalls. We suggest you have the home professionally inspected before making any commitments.

GEEK (KEVIN)

The most important thing to remember when you’re buying a brand new construction is that you can’t take anything for granted. A builder will recommend their preferred lender, but shop around for multiple quotes to be sure you’re getting the best deal. And watch out for hidden defects, missing necessities, and pricey upgrades and upsells. Here’s more advice to help you through.