Clean contracts may be a thing of the past

We (real estate agents) often talk about the merits of a clean contract. A clean contract, or an offer to purchase is simple and straight forward - one that's not complicated by lots of contingencies.

In a tight market, those with hang ups (contingencies) loose to the quickest and cleanest offer. In a soft market, contingencies become more prevalent and important because, let's face it, the reason the market is soft is because there is an unbalance in the supply and demand, and therefore, must proceed with caution.

A contingency in a real estate purchase is something that must be satisfied in order for the sale to go through. Contingencies protect buyers and sellers, but they also provide opportunities for real estate transactions to fall apart.

For example, the buyers may need to sell another property to come up with enough cash for the down payment. If  their property sells, the deal goes forward. If it doesn't, the deal more than likely will fall through. Other common contingencies are for inspections, for financing, and for approval by other parties (like attorneys or accountants).

Less-common contingencies are sometimes more difficult to satisfy. Perhaps the buyers only want to buy a property if they can modify it, or use it, for a specific purpose-more common in commercial real estate. For example, they might need city approval to run a day-care center.

Given the emotional of home buying and selling, most buyers and sellers prefer the cleanest contract possible.

In today's soft market, being able to offer a clean contract may give you an advantage when negotiating with the sellers. In other words, the more contingencies there are, the more opportunities there are  for something to go wrong.

In my opinion, the most important contingency in a real estate contract is for financing. If you write an offer without a financing contingency, you may risk losing your deposit money if you can't get the loan.

You should also have a contingency for inspections- a time frame from the effective date and set parameters.

To make a clean offer, get your financing in order and take care of as many contingencies as possible before you start negotiating.

For professional advise on all aspects of buying or selling Real Estate, please contact me Richard Recuset at-786-287-9272 -email: BailOutCentral@yahoo.com
The Recuset Group