3 Common Contingencies You’ll Encounter in Your Real Estate Contracts

February 10, 2021

When buying or selling a home on the Victoria market, you’ll experience a sense of excitement and relief when signing the contracts that signify a property transaction. These contracts will include the offer price, date of sale, and the parties involved. Your real estate contracts will also have the buyer’s, as well as your own contingencies. These are the conditions that they want you to fulfill before the contract becomes legally binding. Most contingencies that your buyer could include in your contract will be reasonable and pertain to your property’s condition. Unless you’ve agreed to sell the house as-is, these contingencies will require a few responsibilities you will need to fulfill before everything is official. Here are 3 common contingencies you will likely encounter as a property seller on the Victoria Real Estate Market.

3 common contingencies you'll encounter in your real estate contract

Home Inspection Contingency

This is an appropriate contingency that your buyer will likely include in the contract. It will not only make sure your pricing and market value is fair, but to make sure that if they commit to your property, they won’t encounter any problems like infestations, water damage, mold, and more. These could be costly and cause health risks. Suppose these issues are uncovered in your professional inspection. In that case, you will potentially be given time to resolve them or undergo further reviews, or the buyer may drop out of the transaction. 


Appraisal Contingency

With an appraisal contingency, your buyer will want your house to be valued by an official inspector. If it doesn’t meet the minimum amount that they want the property to meet, there’s a chance they may terminate the contract. However, sometimes buyers will still purchase knowing your house was valued at less than they desire. To meet this contingency, you could perform some home improvements, like making sure all appliances are working, your house exterior and roofing are updated, and more. Your house will have a better chance of exceeding the listed minimum value, so you can profit off your home sale and avoid having the buyer walk away.


Financial Contingency

As the seller, you should include this contingency in your contract to make sure the buyer is legitimate, and that you are appropriately compensated for the sale. A financing contingency would outline that your buyer must be approved for a mortgage. Often, they will be pre-approved, but it may take time before the buyer receives the loan. Your buyer may have some say in this contingency that the sale is not official until they are approved for their ideal loan. This may cause a delay in your transaction, so you will need to determine how long you’re willing to wait, and when you should potentially back out of the contract.  


Contact a Top Realtor in Victoria, BC 

For advice on contingencies and the home selling process, rely on the best realtor in Victoria BC, Brad MacLaren. With his experience and expertise, you will manage a profitable and seamless property transaction on the Victoria Real Estate Market. Contact him today to learn more.