Purchasing a home involves a major investment, so every decision that goes into the process deserves thoughtful consideration. In some cases, you may decide to move forward with a particular home purchase under conditional means, meaning you are willing to move forward as long as something specific occurs beforehand.
According to NerdWallet, the real estate world refers to these conditional terms as “contingencies.”
Understanding contingencies
Any number of different types of contingencies exist in real estate. Among the more common types is a mortgage contingency, which says that you plan to buy a particular home provided you receive financing for it.
An inspection contingency is also a common part of the residential real estate process. You may agree to buy a home pending home inspection contingency, meaning you plan to move forward as long as the home inspection does not turn up major defects.
Understanding disclosures
While contingencies give you some protections and chances to back out if things do not go as planned, disclosures also help protect your interests. Disclosures refer to the aspects of a property the seller has an obligation to tell you.
For example, if the home you are considering underwent construction before the late 1970s, the seller must disclose to you whether it contains any lead paint. If the home is in the center of a flood plain, the seller also has a duty to tell you as such. While sellers must disclose information about major structural defects or natural hazards, they do not have to reveal every element of a home. So, if you have specific questions about the home, ask away.
Find more about protecting yourself when buying a home on our webpage.
