Strategies For Winning - Contingencies

In the world of real estate, each party to the transaction has responsibilities to uphold to ensure the process follows a logical and successful end. Of course every transaction has unique challenges, surprises and bumps along the way and it’s your Realtors job to make that process as smooth as possible.

When you’re considering buying a home in Washington, there are often contingencies in place as a buyer, that you and a seller agree to, to protect you along the way. Usually there’s a financing contingency, allowing you reasonable time to obtain underwriting approval. There can be inspection contingencies allowing you time to have a home inspector check the home for potential issues. And there can be other contingencies like delivering clear and marketable title, appraisal, well or septic and many other contingencies that could be a valid reason to exit a contract if problems arise.

You may remember during the Covid-19 pandemic, the housing market simply exploded pushing prices up and buyers further away from their jobs as remote work became a reality. With that activity, came maybe the most competitive real estate market the country has gone through. Not only was demand high, but cost to borrow was historically low, allowing buyers to compete to win. Sellers were all too happy to place their home on the market, and watch the lines form on their sidewalk. But it wasn’t good for everyone.

Buyers were finding creative ways to elevate their offers, either through escalation clauses, waived appraisals or waived inspections. As agents, we would have a stack of offers with “love letters” from prospective buyers, with very similar offers, waiving most of their contingencies. I would imagine, some agents immersed themselves in this free-for-all hoping to get their sellers the most attractive offer possible. And yet, buyers and their agents were left with little choice but to play along in this new reality.

In today’s market, we are still in a competitive environment, but buyers are less apt to waive those contingencies. And that’s smart…for both buyers and sellers. Allowing buyers an opportunity to inspect a home actually provides the seller a level of protection after the home closes, if a buyer uncovers an issue that was not disclosed, through no fault of the seller. If the seller didn’t know about it, and the inspector didn’t find it, it’s much more difficult for a buyer to make their case against the former owner after the fact.

Use your contingencies wisely. If you’re considering buying a home in Tacoma or Washington today, you have the freedom to shorten contingency timelines. Consider getting a pre-inspection before you offer, to remove that contingency. You may even be able to shorten your financing contingency by getting conditional underwriting approval sooner than the average 21 days. Partner with your Realtor to put your offer in play for serious consideration. Otherwise you’ll just be driving around, looking at homes and submitting offers that won’t have a chance of being accepted in today’s more competitive environment.

If you have any questions about the real estate market, or other offer strategies to help you win, please text or call (206) 643-8845 or connect with me at https://erikmolzen.bhhsnw.com/

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