Contingency Removal Period

Appraisal

Once the inspection is complete the next contingency to remove is the appraisal contingency. Most loans require an appraisal and if the home doesn’t appraise for the purchase price buyers and sellers have a few options. The buyer can exercise their right to cancel the contract and receive an full refund of their earnest money, or buyer and seller can renegotiate on the price or buyer can bring the difference between the appraisal amount and loan amount in cash to the closing table to bridge the gap.

Once the appraisal contingency has been met, the buyer’s earnest money is typically what we call, ‘hard.’ This means that should you decide to cancel the contract, you will not receive a refund of your earnest money deposit.

Other Contingencies

If you’re selling your current home in order to buy your new home, you’ll have this contingency as well that needs to be fulfilled before your earnest money goes hard. We’ll go over all of these dates so you know exactly what is expected of you.

Financing

During this time, it’s imperative that you stay in close contact with your lender. They’ll need specific paperwork and information only you can provide them. It is also of the upmost importance that you refrain from any other major purchases that could impact your financing. This would be buying a new car or boat or swiping your credit card for furniture for the new house. These purchases can negatively impact your debt to income ratio and implode your deal before it’s done. Hang tight until we close on your dream home and then you have full reign to get that home furnished or buy that new car.