Reply to Which Contingency is Acceptable in This Market?

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Reply to "Which Contingency is Acceptable in This Market?"

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[quote=Anonymous]I'm both a buyer and a seller right now, and I think it's going to be hard to get them to agree to the contract without the contingencies.  Those are normal contingencies in a balanced market.  They've just been waived the last couple of years because things went crazy.  It's not usual in a regular market for those to be waived.

Also, as a buyer, the interest rate hikes are causing so much upheaval beyond just a higher mortgage payment.  You should be locked in but what if something happens (like the mortgage company closing down, which is happening right now because of what the Fed is doing) and you have to apply with a different mortgage company.  It's now at the higher rate you can't afford because the Fed jacked it .75 or 1 point since the last time you applied, just a few weeks ago.  You need the fail-safe not to have to commit to bankruptcy just to buy a house.  Same with appraisal contingencies...the appraisals should be close or at list price if the price is based on comps.  Things haven't changed that much yet to significantly change comps.  But what if there is a surprise and it appraises low?  Where is the buyer going to get the cash?  They can't sell investments because the value is so low right now, they'd lose a fortune having to cash some out.  And I wouldn't buy a house without an inspection contingency.

So I think it's just gritting your teeth, accepting we're back to normal on contingencies and hoping nothing derails it.  What you could do, if you'd rather rent the house for awhile than sell it lower than you are, is put something in there that if there is an appraisal contingency and it doesn't appraise, you have the option of cancelling the contract.  That's what we would do as sellers if they want an appraisal contingency.[/quote]

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