Sound off with Debbi DiMaggio as seen in SF Gate and the San Francisco Chronicle. (April 17, 2022) Reprint
Although our market is a little different today, August 2022 –I still stand by what I share below regarding contingencies.
Q: What are your thoughts on waiving contingencies? – Jordan Guinn, SF Chron
In our fast moving market it is crucial to remove all contingencies along with making your highest and best offer at the get-go. Inventory is at an all time low and there are more Buyers than ever — all highly qualified. (Edit: Although the market has not moved as fast this summer, it is still important to prove to the Seller you will to perform, so do your work ahead of time). I believe we will see more Buyers back in the market after Labor Day, so Buyers should take advantage of the current market. Don’t follow the pack, lead the pack!
This does not mean you simply tell your Buyer to write a non-contingent offer without explaining what that means and what the ramifications will be should they not perform.
3 contingencies buyers should waive in order to compete and how to be sure they are in a good position to do so.
1. Loan Contingency: A Buyer should be comfortable enough to remove their loan contingency —if, their lender confirms that they are a strong enough borrower for the price they are offering. It’s Not up to the agent.
2. Appraisal Contingency: a few aspects to consider —The lender will loan up to 80% of the appraised amount. How does the home compare to similar sales and how many offers are being submitted. And speak with their lender to get their opinion on the borrower.
3. Home Inspection Contingency: Typically a full set of inspections will be provided. Be sure the Buyer reads them and if they have questions obtain your own inspectors or contractors to look at the house before the offer date. Rarely will a Buyer prevail in today’s market with a contingency. As the agent you must be sure your Buyer understands what this all means to them.
If you have questions about the market or would like us to assist you with your real estate goals, please do not hesitate to reach out.
Debbi DiMaggio | Debbi.DiMaggio@corcoranGL.com | 510.414.6777
Adam Betta | Adam.Betta@corcoranGL.com | 510.414.1250