Contingencies.
A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector.
Inspections and Appraisals
Most buyers will have the property inspected by appropriate contractors within the time frame that was agreed upon in the contract. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution. This is done so that the lending institution can confirm their investment in the property is accurate.
Depending on the outcome of these investigations, one of two things may happen:
- Each milestone is successfully closed, and the contingencies will be removed, bringing you one step closer to the closing; or
- The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract by either requesting the repair of issues raised by the inspection, or by renegotiating the purchase price.
It can be difficult to respond objectively and fairly to the buyer when a renegotiation is requested. This is when a professional listing agent can make a real difference in the outcome of the transaction. Your agent is a skilled negotiator and can be a neutral party and sounding board as you work through this step. Having dealt with various property sales in the past, we guarantee our expertise and total commitment to every customer, no matter what their situation is. This is where our experience can work for you as we can bring our knowledge from previous negotiations into play in finding creative solutions to any issues raised.
The Closing Agent.
Either a title company or an attorney will be selected as the closing agent, whose job is to examine and insure clear title to the real estate. After researching the complete recorded history of your property, they will certify that 1) your title is free and clear of encumbrances (e.g. mortgages, leases, or restrictions, liens) by the date of closing; and 2) all new encumbrances are duly included in the title.
