It is a fair bet that when a buyer and seller enter into an agreement to buyer a home, the buyer wants to buy the house and the seller wants to sell the house. The seller has certain things they look for in a transaction and the buyer has certain things that they look for.

Contingencies within the scope of buying a home give a buyer, or a seller protection from essentially "losing their shirt" in regards to buyer or selling a house. With so many potential contingencies that can be included in a contract to purchase a home, we ultimately suggest that you work with Hermann London Realtors to be able to help evaluate and explain each contingency and its place in your transaction. Most of these contingencies are saying, "I want to buy your home but I need to get a little more information before I completely commit to it."

An important step is for the buyer to get a home inspection. This gives the buyer, and the seller for that matter, a good indication of the kind of work needed to get the home up to acceptable standards. Maybe a hot water heater is on its last legs, and the inspector would give the buyer that information so they can then get into the market to price a new heater. Or another example would be roof life. An educated inspector would be able to climb on the roof and estimate the years left in the current roof so that a potential buyer can again account for the financial ramifications of that.

If a buyer is financing their home purchase with a lender, that buyer wants to make sure that the price they have agreed to pay is not above and beyond what the lender has appraised the home for. If there is no contingency for getting an appraisal that is at or above the sales price, the buyer is then obligated under the terms of the contract to purchase the home anyway and pay out of pocket any difference in the price versus the appraised value. If the buyer is light on cash, this could present a large problem and the deal could be frozen in place.

Another major factor in buying a home is if the buyer has to sell their home first. It is then very important that both buyer and seller understand the buyer would love to buy the house, but if and only if they are able to sell their home. It is of course in a sellers' best interest to accept an offer in which the buyer has a home to sell, but it is already under agreement. This alleviates the need to wait and wait for that party to list their home and get a buyer. If the buyer's home is already under agreement, the only variable is getting that closing to take place.

When entering into an agreement on a home, either as a buyer or a seller, it is important to understand that both parties are interested in making a deal. Understanding contingencies that can be included in the transaction is an important piece of the puzzle. Working with an educated Realtor can help make that job a little easier for all involved.