Getting From Pending to Sold: Understanding the contingencies that may affect the sale of your home
Selling a home can be overwhelming. But it can become even more complicated and expensive if you think your home is sold but then it falls through. If you’re thinking about selling your home, find out what you can do to keep your sale from falling apart.
In a typical home sale, buyers will make a written offer on a seller’s home and, when both parties agree on price and terms of the sale, a fully executed contract has been signed by both parties. At that point, the property’s status changes from “Active” to “Pending”. That tells other buyers and real estate agents that the seller has a buyer and is in the process of closing the deal. However, a home sale or purchase is not actually complete until both parties have signed all necessary legal documents transferring ownership of the home at closing.
Buyers often have contingency clauses written into their contracts. Understanding the various contingencies and how they can affect your home sale is important. The most common contingencies include:
- Mortgage Loan Contingency: The buyer must be able to obtain a mortgage for the property, usually within a specific period of time of signing the contract. As the Seller, make sure you are presented with a Pre-Approval Letter with the offer; do not accept a Pre-Qualification Letter. A Pre-Approval letter ensures that an underwriter has reviewed the buyer’s financials and will commit to giving the buyer a loan.
- Home Inspection Contingency: The home for sale/purchase must either pass inspection or the seller must agree to make any necessary repairs noted by the inspector. As the Seller, you must understand this inspection only includes Major Defects or Safety issues. For older homes, you might want to invest in a Pre-List Home Inspection to avoid any unforeseen problems.
- Sale Contingency: The home purchase depends on the buyer selling his or her current property. There are two (2) scenarios for Home Sales Contingencies. Buyer’s current home is under contract and has a settlement date; therefore, it is contingent on settlement. Secondly, the Buyer has their home on the market but no offer. Seller should require a “Must Sell” addendum with a 72-Hour Kick-out (Home continues to be shown until the buyer can commit to a settlement date. If another contract is received, the first buyer has 72 hours to move forward or withdraw the offer.
- Appraisal Contingency: The appraisal price of the home for sale must either meet or exceed the contract purchase price. At Active Adults Realty, we take additional steps to validate the price. We provide that documentation to the appraiser and make sure the appraiser is aware of all seller’s upgrades. If necessary, we may need to re-negotiate the purchase price to the buyer and seller’s satisfaction.
A successful sale of your home requires thoughtful planning and preparation. Ready to sell your Delaware home? The entire team at Active Adults Realty is with you every step of the way. Contact us today and get in touch with one of our experienced listing agents.