So, you are buying a home in Knoxville? Congratulations! This is an exciting time but it can also be a little anxiety-ridden! That's why it is important for you to have the right real estate agent to help guide you through making an offer on a property once you have found the home of your dreams. A big part of that process is deciding on any contingencies that you might want to include. For example, you may want to protect yourself by including your right to back out of the sale on the discovery of previously undisclosed structural damages. With that in mind, let's look at some of the most common contingencies you might want to consider when buying a home in Knoxville.
1 - Home Inspection Contingency
When making an offer on a home, the buyer must arrange a home inspection. In fact, your lender may even insist upon one. This is when a certified inspector will look at the home and check for any issues you may have missed with things like the plumbing, electrical, HVAC, and structural issues. If you were to go about buying a home in Knoxville without a home inspection, you could end up facing unexpected repairs. This may carry a significant financial cost. A home inspection contingency in your offer allows you to back out of the purchase if any significant issues are discovered. If you still want to complete the sale, you could renegotiate your offer, deducting an amount equal to the cost of repairs.
2 - Appraisal Contingency
Most lenders are going to ask for an appraisal to make sure that the value of the home is equal to the price you are offering to pay. Lenders need to know that they are not lending more money than the property is worth if you default on repayments. From a buyer's point of view, your offer may include an appraisal contingency so that if the appraisal comes back at a lower value than your offer, you will be able to pull out of the sale without repercussions since it is not going to be worth as much as you initially thought it would be.
3 - Home Sale Contingency
Something you may also need to consider when buying a home in Knoxville is whether or not you will be relying on equity from the sale of your current property to make a downpayment on your new home. You may want to consider including a home sale contingency in your offer, allowing you to back out if your home does not sell in time. It is also common for buyers to use this type of contingency where they cannot make mortgage repayments on two properties simultaneously because the sale of their current property has fallen through.
4 - Clear Title Contingency
When buying a home in Knoxville, a title company will run a title report on the property to pull the appropriate ownership details, including mortgages against the house. This report can also uncover outstanding liens or other judgments that may apply to the property. As the buyer, you can request that the seller clear these before the closing date. A clear title contingency in your offer will allow you to walk away from the deal if the property title is not cleared on the agreed closing date.
5 - Homeowners Association Contingency
Suppose you are buying a home in Knoxville that is in an area where many homes are part of a homeowners association or HOA. In that case, a homeowners association contingency is something that you should consider. You have the right to review any HOA agreements and associated documentation before completing the sale, and it is essential that you have time to do so. Some HOA rules can be very strict, and the fees can be substantial, so you will want to consider whether or not you agree to the terms carefully. With a homeowners association contingency, if you do not receive the necessary documentation in time or do not agree to the restrictions, you will be able to pull out of the deal.
These are some of the contingencies that you should consider including in your offer when buying a home in Knoxville. They are designed to protect your best interests and allow you an exit from a deal if it starts to turn sour. You can discuss which other types of contingency might benefit you with your real estate agent, but always remember that some contingencies will turn a buyer off, so you should stick to the ones that are truly important to you. Your buyer may also include some contingencies of their own when accepting your offer.
Wright Realty is a full-service real estate concierge with a wholistic approach to buying and selling property in East Tennessee. We are your trusted advisor and keep open communication throughout your entire buying/selling process. Real Estate done "Wright" means more than just a 'transaction'.
Finding Your Property the "Wright" Way!