If you’re like most people looking at homes for sale in Aspen, you’ll hear the term contingent offer. But what does it mean?
What is a Contingent Offer in Real Estate?
A contingent offer means that someone has made an offer on a home and the seller has accepted it – with conditions. The conditions say that the seller or the buyer must complete certain actions for the deal to actually go through.
The Three Main Categories of Contingencies
There are three major categories of contingencies, or conditions that have to be met: those having to do with appraisals, home inspections and mortgage approvals.
Appraisals
If the appraisal comes in low, an appraisal contingency protects the buyer from having to buy the home despite not being able to get a loan for the full amount. That’s because when an appraiser values a house at less than what the seller is asking, the mortgage lender won’t give the buyer the full sales price – it’ll only allow the buyer to borrow the amount the appraiser says it’s worth. Without this contingency, the buyer would be locked into a contract that forced him or her to come up with those additional funds to meet the sales price.
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Home Inspections
A home inspection contingency typically lets the buyer out of the deal if the inspection turns up something he or she just can’t deal with. If something’s wrong with the home, the home inspection contingency lets the buyer ask the seller to repair it or to renegotiate the home’s price.
Mortgage Approvals
If you can’t get financing to buy a home, a mortgage approval contingency can save you. You don’t want to buy a house that you don’t have the money to pay for – so if your funding falls through, you can walk away from the deal (and you’re not on the hook for hundreds of thousands of dollars).
Are You Selling a Home in Aspen?
If you’re ready to sell your home in Aspen, Woody Creek, Basalt, Carbondale or Snowmass, we may be able to help you.
Get in touch with us right now to find out how much your home is worth – and discover how we’ll be able to help you sell it quickly and for top dollar.
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