Option and Contingency Explained

Did You Ever Wonder Why That Zillow Listing is Not Available To You?

As you browse listings on GloriaVargo.com, BerkshireHathawayHS.com or  realtor.com, you may find homes you like that appear to be unavailable, due to some kind of contingency. If you find the perfect home, but it’s labeled Active Kick Out or Contingent, should you pursue it or forget it?
The reality is that contracts fall through sometimes. If you have a back-up contract, you can buy the home should it come “Back on Market” or “BOM.”

Active kick out
Active kick out means the seller has accepted a contingent offer, such as the buyer has a home to sell before they can close on the seller’s home. The seller can reserve the right to accept a better offer and “kick out” the previous buyer. They must give the first buyer 48 to 72 hours to either remove the contingency and move forward with the purchase, or back out of the contract.

Contingency
Nearly all offers-to-buy have contingencies. Typical contingencies include provisions that the home must meet the appraised value by the mortgage lender’s third-party appraiser, or it must pass a professional third-party home inspection to the buyer’s satisfaction. The buyer may make the contract contingent upon the lender funding the purchase.

Option period
Option periods give the buyer time to get financing and complete home inspections and the appraisal. Unless the buyer acts on a contingency, the home is considered out of option but it can still fall out of escrow.

You are welcome to text me, 214-789-1076, an address that interests you and I will quickly tell a history of that home. Happy house hunting!

Five Tips To Buying In A Fast Market

If you're a buyer in a hot housing market, you may have already lost out on several homes already. How can you get the upper hand? Here are five tips:

1. Get preapproved by a lender. Sharing financial information your lender requests will get you preapproved. You'll know the limits on how much home you can afford, how much money to put down, and what your interest rate will be. A preapproval letter will assure the seller that you're ready to buy.
2. Trust your real estate professional. As a Realor, I knows the market, can feed you new listings that fit your criteria, and have many contacts to learn about homes coming onto the market which you wouldn't get to see otherwise.
3. Make a realistic must-have list. Pick a neighborhood, house type and price range with a limited number of features. Be prepared to make compromises - smaller, fewer bedrooms or baths.
4. Consider less-than-perfect homes. Buying the worst house on the best block is a proven strategy. A home that needs repairs and updates will sell at a discount to other homes. Bringing your home up to the neighborhood standards is a quick route to building equity.
5. Buy under your means. If you get into a bidding war, you'll need a little wiggle room so you can compete. Many homes will sell above list price, so it's smart to keep your cool because you know you can go up if you need to.