How to weigh the costs of contingencies
At their most fundamental level, Contingencies are provisions in the contract that allow either the buyer or the seller to cancel the deal if those conditions aren’t met. This may vary, but typical contingencies include inspections, funding, and repairs. A buyer, for example, may request a contingency that allows them to back out of a deal if the parties can’t agree on repairs after the inspection.
In hot markets, you may come across buyers who are willing to waive contingencies in order to “sweeten” the offer. If there isn’t much competition for your house, buyers will request more contingencies because they are less likely to have their bid rejected.
While contingencies can protect a seller’s interests, they can also encourage the buyer to cancel the contract or bargain for a lower price. This is why it’s important to consider how contingencies could affect your net proceeds when deciding what you’re willing to accept in a bid. If you’re looking for an accurate market value for your home, contact us at 401-396-2888 for a free valuation. We’re always glad to help!