The best way to gauge the risk of waiving contingencies is to take a close look at your own finances, as well as research comparable apartment sales in the neighborhood, our experts say.
In a seller’s market where bidding wars are commonplace, many buyers opt to waive contingencies as a strategy for standing out from the competition. Waiving a mortgage contingency—a clause in the contract that allows buyers to get out of a real estate deal if they can’t secure financing—means that the buyer will lose their deposit if their financing falls through.
“Waiving a mortgage contingency in a competitive market is almost essential for a buyer to be competitive,” says Deanna Kory, a broker with Corcoran. “Buyers who are confident in their financial ability to attain a mortgage often do go ahead and drop the mortgage contingency, because their banker has given them enough assurance that it will not be a problem.”
Appraisal contingencies, meanwhile, protect the buyer in the event that the apartment they’re buying is appraised for less than its sales price. Without such a contingency in place, the buyer would have to make up the difference in price themselves if the appraisal falls short, rather than back out of the contract or re-negotiate the sales price.
The real estate attorneys at Woods Lonergan have decades of experience successfully representing buyers and sellers in every type of transaction. “We mobilize quickly to guide you through every aspect of your purchase or sale, from home inspection to contract negotiations and closing”, says managing partner James Woods. To learn more about Woods Lonergan or schedule a free 15 minute consultation, click here or call 212-684-2500