In the feeding frenzy for homes in the past couple years, the majority of offers had no appraisal, no loan and no inspection contingency. This favored the Seller and truly became the norm. Meaning, the Buyer was willing to buy a home "as-is" with no way out of the deal.
With the slow down in the market over the past few months, we are seeing contingencies come back.
The purchase contract has a 17-day default period written into it to allow a Buyer to investigate, which can be shortened to 'sweeten" the offer.
The contingency gives a Buyer a contractual excuse to cancel the contract during the contingency period, if the buyer is not satisfied with its condition, or anything else affecting the property. The typical Buyer inspections have included: home, pest, chimney, sewer lateral, roof and/or pool. During this inspection time, the Buyer can also investigate the neighborhood, schools, insurance, permits, crime stats, proximity to shopping, dining, hospitals, public transportation, parks and bike paths and other conditions that may affect buyer’s enjoyment and use of the property.
If Buyer is dissatisfied with the property or any condition affecting it, the Buyer may cancel the transaction during the investigation contingency period, or request that Seller repair defects before close of escrow, or lower the purchase price, or give buyer a credit toward the purchase price.
Most Sellers do a pre-sale home and pest inspection for their own use and knowledge. We recommend Buyers review these reports and seller disclosures carefully, along with the reports they have paid for and completed, with their agent. They should contact the inspector with detailed questions.
Buyers should not wait until the final day of contingency period to ask for repairs. We recommend buyers have inspections scheduled before they write their offer so time is not wasted trying to secure an inspection. Buyer’s requests may trigger a back-and-forth negotiation over the extent of the repairs, credits or price adjustments; this is where your seasoned, experienced Realtor can help with professional guidance.
At the end of the day, there is compromise and a meeting of the minds.