When you make an offer to buy a house, you can include contingencies. Those are terms that will have to be met before the transaction can go forward. Contingencies are common, but a seller doesn’t always accept them.
Sale Contingency
Sometimes a buyer has to sell a house before purchasing another one. If you’re in that situation, you might include a contingency in your offer that states that you will buy the new house after you sell the one where you’re currently living.
A seller may or may not agree to those terms. There is no way to predict when you will sell your home, or if you’ll be able to sell it at all. A seller who has to move soon, has received an offer without a sale contingency from another buyer, or doesn’t want to take the house off the market and possibly not be able to sell it, might reject your offer.
Financing Contingency
Most people who buy a house need to take out a mortgage, so it’s common for a purchase offer to include language stipulating that the deal will only proceed if the buyer is able to secure a loan that meets certain requirements within a limited period of time. For example, you might include a contingency stating that you will have to get a mortgage for a specific dollar amount at an interest rate that is at or below a particular level within a month. If you can’t, you’ll be able to back out of the deal.
The seller might not be confident that you’ll be able to get a loan with those terms or might not want to have to look for a different buyer if you can’t. If the seller has gotten an offer from a buyer who has been preapproved for a mortgage or who can pay in cash, the seller might reject your offer.
Home Inspection Contingency
Purchase contracts typically include an inspection contingency that gives the buyer the right to have a professional inspect the house and put together a report listing problems. Based on that information, the buyer can decide whether to purchase the house, ask the seller to make repairs, renegotiate the price, or walk away.
If the house is old and run down and it’s listed “as is,” the seller might refuse to agree to an inspection. Since the home’s condition has already been factored into the price, the seller won’t be willing to repair any problems that an inspector might find.
A seller might also reject an agreement with a vague inspection contingency. For instance, if your offer says that it’s contingent on a “satisfactory” inspection, the seller might ask you to spell out what that means before agreeing.
Be Careful with Contingencies
If you want to buy a house, you can include contingencies in your offer to protect yourself, but the seller doesn’t have to accept them. Keeping your contingencies limited and specific can increase the likelihood that your offer will be accepted.
