Removing Contingencies Early: Is This the Answer for the 2021 Real Estate Market?
Despite a global pandemic, the 2021 real estate market has been busy – especially in California. Competition is strong, and it can feel impossible to get an accepted offer in this particular market. One potential option is to remove contingencies. Keep reading to learn more about this option, and check out our escrow resources while you’re here.
Removing Contingencies Might Make You Stand Out to a Buyer
What happens when you and another potential buyer are both offering the same price? How does the seller decide which one to choose? They are likely to consider things like who can pay cash and what contingencies are included in the offer. If you can be the buyer who removes contingencies early, then you could be the winner in a multi-bid situation.
Removing Contingencies Can Make You Appear Less Risky
Not only is it more convenient for the seller if you remove contingencies, but it can also act as a sign that your offer is less risky than others. Contingencies give the buyer the option to back out if certain things do or do not happen. The buyer without contingencies is much closer to a sure thing for the seller.
Removing Contingencies Can Make the Seller Feel One Step Closer to the Finish Line
If the seller wants nothing more than to get the property sold and move on with their life, they are much more likely to view a case that has no contingencies as a faster way there than an offer that comes with a long list of contingencies.
There Are Downsides to Consider
Of course, there are downsides to removing contingencies. If there weren’t, then all potential buyers would remove them. Remember that they are there to protect you in the event that you need to cancel the purchase contract due to information discovered after the offer is made. Without contingencies, you have no legal protections.
At that point, if you have to pull out of the transaction after the Earnest Money Deposit has been made, then you will lose it – and this can be many thousands of dollars. For a real estate agent, if the sale falls through, then they must re-list the property – which could lead to a lot of extra marketing money spent.
Talk to Your Real Estate Professional to Find the Best Option
No matter what your situation is, it is always wise to work with a real estate professional who can provide you with the best possible outcome for your case. They can review your options, the home you want to buy, and give you honest, experienced advice on how you can best proceed.
