Many clients of mine, when looking for Encinitas homes, note the complexity and confusion of Encinitas real estate documents. When purchasing Encinitas homes it is not uncommon to feel overwhelmed by the amount of paperwork that is required. An Encinitas real estate agent will guide you through this process and make it as simple as possible, but that doesn’t mean that you should remain uninformed about what these documents say and mean.
Contingencies in real estate contracts protect you from matters going unresolved to your satisfaction, and these three contract contingencies are absolutely necessary to protecting yourself and your interests.
- Contingent on the property being appraised at a minimum for the contract price – This contingency makes sure that you aren’t paying more down on property that is valued less than the contract price. For example, if your contract price were $500,000 and you intended to get a loan of 80% you would have to put down $100,000. Should the appraisal come in low at $450,000 your loan amount will only be $360,000 leaving you with a down payment of $140,000.
- Contingent on financing – This basically means that the purchase is based on your ability to receive the necessary financing. If you cannot acquire financing then the contract is void and your deposit is returned.
- Contingent on a satisfactory home inspection – This means that if the home inspection comes back with a laundry-list of issues that result in the home being far more work than you believed prior to the inspection you can walk away from the sale. If a seller refuses this last contingency in particular, cancel the deal immediately.
Make sure that your contract has these contingencies in place. Any knowledgeable Encinitas Realtor will make sure that your contract makes these provisions.