Sound Off: What to consider when weighing contingencies

A: To write a purchase offer that is strong enough to prevail, buyers must consider the degree of risk they are willing to assume.

Which contingencies should be waived will always vary. The specific home, its condition, the price, the inclusion of a disclosure packet with termite report and general home inspection all factor into this decision.

More often than not, the seller will provide inspection reports and disclosures enabling buyers to accurately assess the condition of the property. If this is not the case, including a short inspection contingency would be wise and most likely not weaken the offer.

Buyers who are preapproved for their financing should discuss with their mortgage broker the risks of waiving their appraisal and loan contingencies. The mortgage brokers I work with have been very effective in obtaining appraisals that confirm the sales price and getting their loans funded in a timely manner.

Buyers have to be willing to write the strongest offer they can live with and still be able to sleep at night.

Karen Starr, Grubb Co., (510) 339-0400,

starr@grubbco.com

A: Let’s face it. In our current market, you are going to face some competition when bidding for a home.

Often it boils down to price, but with conditions in our market, it may be close even then. That’s when it comes down to other terms and contingencies in your offer. You have to be strategic. This goes for sellers as well.

When a seller is looking for the most money with the least risk, if advised correctly, there will be a home inspection already done and ready in the disclosure package. The disclosure package allows the buyer to review details with their agent and shows all the seller’s knowledge of the property.

For buyers, this one is easy. Often one can get a pre-offer inspection done verbally as well before making an offer. I wouldn’t recommend ever waiving an inspection contingency in your offer, unless you are a builder and it is your dream home.

Many homes hold secrets in those walls, and the last thing you want is to find a surprise cost a year later in your largest investment.

Clayton Humphries, Intero Real Estate,

(415) 496-9079, clayton@humphriesrealty.com

A: When you make your offer on a home, you may include contingencies in order to complete investigations or finalize finances and a loan before completing your purchase.

It is crucial you know what you are buying and have considered how you will handle issues that may come up with your new home. Contingencies give you a little bit of time to make sure this is the right home for you.

Never offer to waive any contingency if you are not sure. Once you release all contingencies, you are buying that home.

So what to do when your competitors are making offers with no contingencies? Know yourself, get smart about buying houses and read and understand all the disclosures that are provided. Perhaps most important, know there is no perfect home.

The contingency period allows you to confirm that the home’s condition is something you’ll be able to deal with and afford financially. If you do need a contingency period, try to make that period as short as possible. Your real estate agent will work with you through these processes.

Mischa Lorraine, Bay Sotheby’s International Realty,

(510) 331-3617, mischa@mischalorraine.com.