hand-101003_640You finally have an offer on your home, but it comes with a long list of contingencies. Should you still be excited, or are these buyers not very serious?

Don’t be turned off by a contingent offer. A contingency by definition is a chance, or possibility conditional on something uncertain. In real estate there can be a lot of uncertainties. So buyers, and occasionally sellers, protect themselves by providing a way out of their contract without losing their earnest money.

In most home sales common contingencies include, securing suitable financing, the home appraising for the offer price, passing a home inspection, and the sale of the buyer’s current home. Most people need to mortgage to purchase their home and need to find a lender who will give them a mortgage. So in order to protect themselves they put an offer contingent of financing. In obtaining financing, most banks perform a property appraisal in order to insure that the property is worth what they are financing. If the buyer cannot find a lender who will loan them the money in a specified amount of time, the buyer has the right to walk away from the offer with no penalties. Home inspections are also a very common contingency in an offer. Home inspections can range from general to very extensive depending on the location and condition of the home. If the buyers are also trying to sell their current home, or if they have a sale pending they protect themselves from having a possible two mortgages by making their offer contingent on the sale of their current home.

Remember, contingencies are not a bad thing, and are very common in order for buyers to protect themselves. However, in competitive markets an offer with no contingencies is always more appealing.