What are your thoughts on waiving contingencies?

A:

The waiving of contingencies in a purchase offer is a significant choice. When a non-contingent offer is accepted by a seller, the buyer’s earnest money deposit (customarily 3% of the purchase price) becomes non-refundable.

The buyer is agreeing to purchase the property in its “as is” condition, relying primarily upon the seller’s inspection reports and disclosures to be fully informed as to the condition of the house.

Were the real estate market a more level playing field, waiving of contingencies would not be advisable. Contingencies give buyers the opportunity to conduct their own inspections and ensure that the property appraises for the price they are paying for it.

Our current “bull” market essentially requires buyers to forego the safety net of contingencies and commit fully to closing their escrow without the certainty afforded by them.

Sadly, it is virtually impossible to prevail in a multiple offer situation these days without doing so.

A:

On the buy side, I ensure that buyers know their responsibility to diligently research and discuss with me all reported, gleaned, and potential aspects and issues of the property before waiving their inspection contingency, and if they do so, then be prepared financially and emotionally to embrace any forthcoming repairs.

I also advise sellers to disclose their property information with detail and transparency so that buyers are able to utilize that information meaningfully in their research.

Waiving a loan contingency should be done only after my clients and I discuss the file and opportunity carefully with their lender, who should be confident in the likelihood of the loan funding and closing on time.

It’s crucial to use a local, reputable lender to ensure great customer service for my buyers as well as to instill confidence in sellers, who want a smooth escrow. This collaborative approach, with each professional providing expertise, ensures that my clients are well supported every step of the way.

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Send an email to Jordan Guinn at Realestate@sfchronicle.com