Do contingencies make it more difficult to purchase a home?

Asked by Trulia Atlanta, Atlanta, GA Wed Apr 10, 2013

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Patricia Queen and Joseph Rigoli’s answer
Patricia Que…, Agent, Atlanta, GA
Thu Apr 11, 2013
If you live in Atlanta and your interest is to purchase a home is a very desirable community, your best bet is to eliminate a financing contingency. However, I recommend that you keep your inspection and appraisal contingencies. To do this without putting yourself at risk you must secure a loan commitment prior to shopping and ever presenting an offer. Your loan commitment will trump a competing offer's pre-approval letter.

However, even with new homes, there are two contingencies that should almost always be included. One is a home inspection and I recommend that you handle this within 12 days+-.

The second is an appraisal contingency. If you are purchasing in a seller's market where several offers push the price over the asking price, the home may not appraise and you may not have the cash to handle the difference, in which case the opportunity to renegotiate will be important to your success. So, check with your lender to find out how quickly the home will appraise, add a buffer of a few days and that will become your financing period.

Be careful and have fun finding your new home. Best of luck.
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Cassandra M.…, Agent, Canton, GA
Thu Apr 11, 2013
Short answer - YES. Although they do not mean you are unable to get a winning bid.

Most sellers will look at the best offer - and that doesnt mean highest price. If you go in with all your documentation, a strong letter of approval from a reputable mortgage lender, a substantial earnest money and limited time frames, it may put you in a better position than others.

I recently won out a bid with a contingency to sell my clients house, however the house was already under contract for cash and my client made a strong offer to purchase.

Good luck.
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Jeff Jackson, Agent, Atlanta, GA
Thu Apr 11, 2013
Contingenices do make more difficult to purchase a home, especially in a multiple offer situation. A seller might not except your offer based on the extent of your contingencies. However, structuring a contract wisely with contingencies can help protect you in case something does not go through.

Jeff Jackson
Prudential Georgia Realty
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Lee Taylor, Agent, Decatur, GA
Wed Apr 10, 2013
Of course. And, the degrees of difficulty are quite relative to the specific purchase attempt

You ask the most sophomoric questions, Trulia Atlanta.

Think subjectively - be more specific - grow a more intuitive brain.
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Fred Yancy, Agent, Woodstock, GA
Wed Apr 10, 2013
The fewer the contingencies, the better chance you have at winning a bidding war. Of course, contingencies are only one factor looked at when deciding which offer to accept. Keep in mind that if you put a lot of contingencies into your contract, there are thirty or forty other people bidding for that same house who may not be as "difficult".
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