3 Contingencies That Every Honolulu Home Buyer Should Know About

If you’re like most Honolulu home buyers, you aren’t a real estate expert. You are simply a man or woman that is interested in purchasing a Honolulu house. That can make working through the process of writing an offer difficult because there is a lot of things that you need to know. One of those things is what kind of contingencies you want to include with your offer.

If you are scratching your head about what that means, keep reading. Below are three of the most common contingencies included in an offer.

What is a contingency?

Contingencies are safety nets for Honolulu buyers. It allows you to include a specific need that must be met in order for you to continue moving forward with buying the Honolulu house. If that need isn’t met, then you are free to walk away from the contract and the house without a second thought and with your earnest money deposit in hand.

#1 Home inspections

If you are obtaining a mortgage for your Honolulu property your lender is likely to require that you include a contingency for a home inspection. This means you are agreeing to buy the house as long as nothing unusual comes up in the inspection.

Once the offer is accepted you will hire a home inspector to walk through the house. They will have a long checklist of things they are looking at from the roof all the way down to the foundation.

When they are finished, they will provide you with a report of anything you should know. This will include expected life remaining on the major systems, any problems like leaks in the windows or cracks in the foundation. If there are costly repairs, you can decide to renegotiate the deal with the seller, leave it as is, or simply walk away from the Honolulu house.

#2 Home appraisal

Another contingency that your lender will insist you include in your offer is for a home appraisal. This saves you from borrowing money over the value of the Honolulu house. It also stops you from paying too much and prevents the lender from lending money that they have no way of recouping if they needed to.

An appraiser will come out to your Honolulu house, look it over, compare it to comps in the area, and determine a value for the property.

#3 Financing approval

If you don’t have cash to buy a Honolulu house, you will want to include this in your offer. This saves you from losing your earnest money deposit if for some reason your financing fell through and you were unable to move forward with purchasing the house.

If you are interested in a Honolulu house that is showing as a contingent listing, you could still have a chance at getting it. Talk to your agent about options for making an offer and make sure you keep your eye on it. It’s not uncommon for a Honolulu house to come out of escrow because a contingency, such as mortgage approval, fell through.