Selling a Home in Atlanta? Key Contingencies You Need to Know
What are contingencies in real estate and why are they important?
According to Investopedia.com, “A contingency in real estate is a ‘condition or action that must be met for [the] contract to become binding.’” Contingency clauses are there to protect the real estate buyer and seller. As Michael J. Franco, a broker at Compass, explains: "Contractual contingencies protect the parties from various issues that could arise throughout the transaction."
What are some common contingencies when buying or selling a home in Atlanta?
The various types of contingencies are important to understand whether you’re buying or selling a house in Atlanta. These clauses outline specific conditions necessary for a smooth process. From financing and inspection to appraisal and title contingencies, each plays a pivotal role in shaping the deal. Understanding these intricacies is essential for successful navigation of the market.
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Appraisal contingency: Lenders usually won’t cover a mortgage that is less than the appraised value. An appraisal contingency allows the buyer to withdraw from the contract if the appraisal finds that the house is worth less than what the potential buyer offered.
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Disclosure contingency: Although Georgia doesn’t require sellers to complete a seller disclosure form like many states, sellers must still disclose issues with the house to potential buyers when asked. Buyers should ask the seller a lot of questions, and they can even request a written disclosure. However, if an inspection turns up issues with the structure that haven’t been communicated by the seller, a disclosure contingency can allow the buyer to pull out of the deal.
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Financing contingency: Also known as mortgage contingency, this contingency allows buyers to back out of the sale without giving up their deposit if they can’t get a loan after acceptance of the offer.
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Home insurance contingency: If the Atlanta house being purchased is uninsurable due to being in a flood plain or other risky area, or if there are code violations, the buyer can back out of the sale.
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Title contingency: This is a standard contingency that allows the buyer to back out of the sale if there are issues with the title, such as a tax lien on the house.
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Home sale contingency: This contingency is most often used in a buyer’s market and allows a buyer to back out if they can’t sell their current house within a specified timeframe, protecting them from being obligated to purchase a new house without selling their existing one first.
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Rent back contingency: This contingency will allow a seller to rent the home from the buyer until the seller can close on a new house.
The typical contingency period in a real estate transaction usually ranges from 30 to 45 days, although it can vary depending on the specifics negotiated between the buyer and seller. This period allows the buyer to conduct inspections, secure financing, and address any other contingencies outlined in the contract before finalizing the purchase.
Removal of contingencies
Once contingencies outlined in a real estate contract are met, buyers have the option to remove them in writing. This process typically involves submitting a contingency removal form to the seller or their agent. Removal of contingencies signifies the buyer's satisfaction with the property's condition, financing terms, or other specified conditions. It also signals their commitment to proceed with the transaction without these safeguards in place. Once contingencies are removed, the deal moves closer to closing, with fewer barriers to completing the sale.
Streamlining the sale: Avoiding contingencies and complicated negotiations
HomeVestors® in Atlanta is an off-market house buyer that can buy your house without the hassles of contingencies, open houses, house repairs, For Sale signs in your yard, and other stressors that accompany a traditional house sale. We provide fast offers and pay typical closing costs, and you pay no commissions. Our offers are below market value in exchange for speed and convenience.
Just reach out to us for a free, no-obligation consultation at your house. We’ll take a tour and answer your questions. Sometimes, we can give you an offer on the spot. If you accept our offer, we’ll work with you to choose a closing date that fits your timeline. Our reviews and nationwide 95%* customer satisfaction rating attest to the speed and simplicity of our house-buying transactions.
This blog is for informational purposes only and should not be considered legal advice.