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.

Title Contingency

Contingency is a clause buyers include when making an offer on a home that allows them to back out of the deal without losing their deposit if the conditions of the clause aren’t met. So what is a title contingency, and should you include one in your offer?

CHIC (Pearl)

Title contingency protects a buyer against fraud by ensuring the seller is legally authorized to list the property. Imagine going through the whole purchasing process, including negotiation, offers, bidding wars, loan agreements, inspections, and more, only to find out the property isn’t available after all. Sounds like a good idea to me!

GEEK (Kevin)

Title contingency may sound great, but it’s actually redundant in California. That’s because when you buy a home here, either the seller or buyer are required to get title insurance, which clears any clouds around the ownership question. Typically a title check is also performed during escrow, so there are multiple protections for buyers.

Are you asking the right questions?

There’s no such thing as a stupid question, especially when it comes to selling your home. But it’s hard for a seller to know the right questions to ask if they’ve never done this before. That’s why it’s important to pick an agent who knows the answers. 

CHIC (Pearl)

Beyond the basics of price and commission, it’s important to ask an agent about their marketing strategy. How can they ensure your property gets maximum exposure in a crowded market? Related to this is timing. Is now the best time to put your property on the market? If so, why? If not, why not, and what would be a better time? And there’s nothing wrong with asking an agent directly why they are the best person for the job. If they can’t answer that question, it’s a big red flag!

GEEK (Kevin)

As a numbers guy, it’s important for me to know about valuation and pricing. How will the agent get you top dollar without scaring off potential buyers? How do they plan to handle a bidding war? Can they guarantee none of the buyers will walk away before you get the offer you want? And what will the agent do to mitigate your risk by avoiding contingencies in the contract? A successful sale requires attention to detail, and your agent should reflect that.

Thank you, George Washington!

Who doesn’t love an extra day off at the end of the weekend, especially when there’s so much to get done before the springtime thaw! How did you spend your Presidents’ Day?

CHIC (Pearl)

I spent most of my Monday showing homes to prospective buyers. I guess you might call this work. For me it’s a labor of love, and it’s great to see buyers coming back to the market after a slow holiday season. At the end of the day, we treated ourselves to a hike in the Windy Hill Preserve!

GEEK (Kevin)

If you know me, you’d probably guess that I used the extra day to get projects done around the house. And normally you’d be right. But just this one time, I got some extra sleep and binge watched classic TV shows until Pearl dragged me out of bed for a sunset hike and some photos!

Love is in the air!

While we might agree to disagree on a few things – okay, a lot of things – we decided to create a meal together to kick off our Valentine’s Week.

CHIC (Pearl)

As usual, I skipped straight to dessert! But because baking is not my forte, I enlisted a friend to help craft these beautiful red velvet cupcakes. And we shared the love of eating the product to avoid a sugar high! Want to try at home? Here’s the recipe for the cupcakes and frosting.

GEEK (Kevin)

While Pearl got her bake on, I was busy prepping our main course: smoked pulled pork BBQ. There truly is nothing like this tender, juicy goodness, especially piled up on a platter and paired with homemade margaritas including limes from our yard. Learn to do your own smoking.