Tag: home buyer advice

What Does Contingent Mean in Real Estate? A Complete Breakdown for Buyers and Sellers

Posted on by Will Sing

In the world of real estate, the term “contingent” can sometimes leave buyers and sellers scratching their heads. Whether you’re navigating the buying process or preparing to list your home, understanding contingent offers is crucial. In this post, we’ll break down what it means to be “contingent” in real estate, how it affects you as a buyer or seller, and what potential scenarios you could face.

What Is a Contingent Offer?

A contingent offer on a house means the buyer has included a protective clause in their contract. This contingency gives the buyer an option to back out of the purchase if certain conditions are not met. Typically, a contingent offer involves the buyer needing to sell their current home before they can finalize the purchase of a new one. Think of it as a step in between “active” and “pending”—the property is not quite under contract yet, and there’s still an opportunity for other buyers to step in.

If you’ve heard the term “bumpable buyer,” it means that the current buyer’s offer is contingent on selling their home, and another buyer could potentially “bump” them out of the contract. Essentially, it’s a state of uncertainty, and another buyer might have a chance to swoop in.

What Does Being Contingent Mean for Buyers?

For buyers, there are two key scenarios involving contingent offers:

  1. You Are the Contingent Buyer: You want to buy a home, but you need to sell your current property first. This makes your offer contingent on that sale, which can sometimes be a hurdle. If another buyer who is not contingent decides to make an offer, you will usually have 48 to 72 hours to either remove your contingency or lose the property.
  2. You Are a Competing Buyer: You want to buy a property that already has a contingent offer. In this case, you can put in an offer, which then triggers the “bump clause.” The original buyer (who is contingent) will have a set amount of time to remove their contingency—if they can, they go from “contingent” to “pending,” solidifying their contract. If they cannot, the seller is free to accept your offer, and the contingent buyer is out.

What Does Being Contingent Mean for Sellers?

If you’re selling your home and receive a contingent offer, it’s important to understand the potential risks. If the buyer needs to sell their current home, this could delay your closing timeline. For instance, if their home takes longer to sell than expected, you might need to extend the closing date, which can be problematic depending on your plans.

It’s also essential to assess the buyer’s preparedness to sell their current property. Are they already on the market? Are they prepped and ready, or are they just starting? The more ready they are, the less risk you’ll face. Given the additional uncertainty, contingent buyers often need to make a stronger offer to compensate for the risk you are taking.

Key Takeaways

  • Contingent Offers: Buyers need to meet specific conditions, often involving selling their current home.
  • Bump Clauses: If you are the contingent buyer, be prepared to act quickly if a competing offer comes in.
  • For Sellers: Contingent offers can mean more risk and longer timelines, but they might come with a higher price to compensate for that risk.

Watch the Full Video: The REAL Difference Between Contingent and Pending

If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

For a more detailed consultation or to get started on your home buying journey, schedule a free strategy session here. You can also access my Free Buyer’s Guide to help you through every step of the process here.

What To Look For When Touring Homes?

Posted on by Sofia Gallamore

On the surface, touring homes sounds pretty self-explanatory; you walk in and see if you like it, right? While your overall impression of the home is of course important, there are a few additional aspects that my clients and I always investigate to gain additional information. Here is a list of items that you don’t want to miss when touring homes as a buyer:

 

  • Look Out for Signs of Deferred Maintenance: If the owners haven’t taken care of the little things, we can’t be confident they went out of their way to take care of the big things. Some examples include chipping paint, damaged/missing roof shingles, or rotting deck boards. Signs of deferred maintenance are typically an indication to look closely at the home’s major elements and systems.

 

  • Be Aware of Smells (Good and Bad!): Does the basement smell musty? This could indicate moisture issues. Odors from pets or smoking are also something to consider, as they may need to be handled by a professional to remedy. Strong good smells (candles, air fresheners, cleaners, etc.) can also be a red flag. While not always, they can sometimes be used to conceal undesirable odors.

 

  • Identify the Age and Condition of Major Systems: Locate the furnace, water heater, electrical panel(s), and A/C unit (if there is one). Most of the time, you should be able to identify the serial number, model number, or permit, which should provide an installation date. Be aware if these systems are nearing the end of their useful life and may need to be replaced soon.

 

  • Consider the Time of Day You’re Viewing: If you really like the home, consider stopping by the property at another time of day. For instance, if the home is across the street from a high school, how challenging is it to pull out of the driveway at 3 pm when school is getting out? Or if you’re shopping in an urban neighborhood, what is the street parking lot like in the evening when everyone is home from work? Maybe the industrial building on the other side of the backyard is silent on the Sunday afternoon you stopped by the open house… but how does it sound during business hours on the weekdays?

 

  • Investigate How Sound Travels in the Home: Especially if you plan to have a shared housing situation (roommates, renting out an attached ADU unit, etc.) it’s important to know how sound transfers. For example, I’ve toured homes with client’s who were looking for to purchase a home and that they could rent out the daylight basement to off-set their mortgage. Whenever we would tour homes together, they would go downstairs and I would walk around upstairs. Together, we were then able to get a feel for how much sound traveled throughout the home. This is an important detail that is often overlooked.

 

  • Don’t Skip the Basement: While maybe not the most flashy or exciting part of the home, it can be one of the most revealing. Together with your agent, investigate the condition of the basement and look for signs of efflorescence (the white powdery substance on the cement, indicating moisture issues), shoddy repairs, or a failing foundation. Take into consideration the era of the home’s construction and what common challenges homes of that era encounter. If the home does not have a basement, I typically will locate the crawlspace access and take a peek to see if there are any obvious signs of moisture or other concerns.

 

  • What’s Nearby?: You probably have a good idea of the nearby schools, restaurants, and shopping centers, but there are some other hyperlocal considerations to make when viewing a home. Being a block or two from a fire station, police station, or hospital could be a pro (fast response times) but you will have to deal with sirens at all hours of the day (and night). While it may not be a dealbreaker for everyone, it is something to note.

 

  • Look for Evidence of Pests: Keep your eyes out for signs of current or historical pest issues. These could be traps, wood shavings, or droppings. Sometimes these pest issues have already been treated and are low-risk, but sometimes they can be ongoing and prove challenging to remedy.

 

  • Always be Looking for Signs of Moisture: Leaks, poor-ventilation, and day-to-day activities can result in moisture issues in a home. Look closely in bathrooms, kitchens, laundry rooms, basements, and upper-floor ceilings. Condensation on the windows, staining or discoloration on the walls, and warping cabinets/floors/baseboards are all signs of potential water damage. We do live in the PNW after all, so these issues are not entirely uncommon (although that does not make them ok!).

 

The home search can be a very exciting time in the home buying journey, and it tends to be where my clients learn the most. I thoroughly enjoy coaching and educating my clients on home maintenance and construction. When we do find a home they like and are in contract, this time spent learning about homes also typically makes discussions around the inspection go smoother, as we have likely already spent weeks if not months discussing common items that may come up.

If you are curious to learn more about the entire home-buying process, I have developed a complete home-buyer’s guide with nearly 20 pages of tips, insight, and practical information. If you think this may be helpful to you, click here to download my guide for free!

Your friend and realtor,

Sofi