Buying a home is a multistep process, and any number of issues may arise that complicate matters and throw a wrench in the works. In some cases, you may want to make an offer on a home on a conditional basis, and this is where something called contingencies come into play. What are contingencies, and how do they help protect you during the home-buying process?
Per NerdWallet, contingencies are something that allow you to back out of a home sale if certain conditions never come to fruition. For example, you may agree to move forward with a home purchase as long you find a mortgage lender to approve you for a loan.
Types of contingencies
Other types of contingencies also protect your interests during the home-buying process. A home inspection should show if there are any major defects in the home you want to buy. You may agree to buy a particular property provided the home inspection shows it to be suitable and in good shape.
Another common contingency is the home sale contingency. This type dictates that you plan to buy a new home as long as you are able to sell your old one.
Disclosures, meanwhile, are the things a home seller must tell you before you buy the property. If the house is within a flood plain, the seller must typically tell you so. If there are other natural or environmental hazards associated with the home, the seller also has an obligation to tell you about them.
If the home contains any lead paint, which is harmful to your health, the person selling the home also has a legal and ethical obligation to tell you. Find more about how to protect yourself when buying a home on our webpage.