Buying a home is the biggest purchase many Louisiana residents will make in their lifetime. Understandably, homebuyers will want to protect themselves, their money and their investment in the process. Various real estate contingencies exist so they can do just that. Here are six of the most common.
Number one: mortgage. This is a topic this firm has addressed in another post. As a short review, this contingency allows a buyer to walk away from a purchase if he or she is unable to secure a mortgage loan needed to complete the sale.
Number two: appraisal. No one wants to end up paying more for a home than what it is worth. An appraisal contingency allows a buyer to walk away if the home does not appraise for at least the sales price.
Number three: home inspection. This is another topic this firm has addressed in another post. As a short review, the home inspection contingency allows those who wish to walk away from a purchase due to problems found with the property during the inspection the ability to do so without penalty.
Number four: title. Problems with titles arise more often than people think. If there is an issue that comes up that cannot be easily resolved, this type of contingency allows the buyer to back out of the purchase.
Number five: sale of current home. Many homebuyers already own property that they need to sell before they can purchase a new home. A sale of current home clause allows a buyer to walk away from a purchase if the purchaser is unable to sell his or her current home within a certain window.
Number six: insurance. Mortgage providers often require a buyer be able to obtain homeowner’s insurance before they will approve the loan. By adding an insurance contingency, either party will have the ability to cancel the purchase if insurance cannot be obtained.
protect homebuyers and sellers. There are only select cases where avoiding the addition of contingencies is appropriate. Legal counsel can help Louisiana residents determine which contingencies, if any, to include in the purchase agreement.