How can buyers write competitive offers without sacrificing their protections?
If buyers remove all of their contingencies at the offer stage, what protections do they have throughout the rest of the process? This is an excellent question that is very relevant to the current market. Eliminating contingencies upfront can be risky, so today I’ll share a few strategies to help make your offer safer while remaining aggressive:
1. Eliminate financial risk. Many lenders are getting their buyers fully underwritten before they even look at properties. That way, when you do find the right home, you can write an offer without a loan contingency. Getting fully underwritten early on in the process also helps speed up the closing and lets you compete with cash offers.
2. Investigate the property. Before you write the offer on the home and remove your contingencies, review the home’s title report, disclosures, and other important documents. When we list a house, we give all the disclosures to the buyer upfront so that they have a good perspective on the home’s potential defects. Some buyers will have a contractor, handyman, or physical inspector go through the property with them while they’re writing the offer.
3. Look at the big-ticket items. What is the condition of the important areas like the roof, foundation, plumbing, electrical, and so on? Be sure to look into these key areas because they can contain unpleasant surprises. Inspecting these items helps to eliminate risk. You can also do a five-day physical contingency and cram the inspections into that time frame; if you discover major problems and want to walk away from the deal, you can.
In the end, there are always ways to write an aggressive, attractive offer that still has protections in place for you. If you have any questions about contingencies or writing competitive offers on homes, don’t hesitate to call or email us. We’d love to help you.