Melissa Terzis, Real Estate Expert in Washington DC, writes at Huffington post, that home buyers in a seller’s market are waiving contingencies as a way to compete. Terzis argues that they put themselves at risk of losing their deposit.
One contingency they waive to be competitive is the home inspection.” In this market buyers are afforded the ability to inspect a home in one of two manners — a general inspection in which they forfeit their right to negotiate with the seller for any repairs, or a home inspection where they can go back to the seller and ask for compensation or repairs.” Sellers don’t like the later. If the inspection turns the buyer off, then the seller must disclose everything to the next prospective buyer.
A second contingency they waive is the appraisal. “If the property appraises below the contract value, the lender will only underwrite the loan for the financing percentage the buyer specified. If the buyer was putting 20 percent down, the lender will only finance 80 percent of the appraised amount, not 80 percent of the contract price.” If the appraisal is too low the buyer must put up more money or walk away.
The third contingency they waive is the financing. “This is risky to waive only from the aspect that the financing approval is ultimately up to the lender.” If the buyer has chosen a lender that knows the neighborhood and does everything right, then this is the least risky.
Terzis concludes, “Contingencies exist to protect buyers, and seeing them waived in the name of getting a house is unfortunate and dangerous. There are plenty of stories of buyers who were encouraged to waive inspection completely and they paid dearly for it. The risk-taking buyers don’t believe it though until they see rain outside their window… and rain coming through their ceiling into the middle of their living room.”
If you are worried about an inspection of your house or worried about your house appraising correctly, call Trusted Homebuyers. We are here to help homeowners out of any kind of distressed situation. As investors, we are in business to make a modest profit on any deal, however we can help homeowners out of just about any situation, no matter what! There are no fees, up-front costs, commissions, or anything else. Just the simple honest truth about your home and how we can help you sell it fast to resolve any situation.
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