The only constant is change, and with the market being in a constant state of change, there is no better time to talk about the point where most deals fall apart, and that is during the home inspection contingency!
First, what is a contingency? A contingency is anything that your purchase (or sale) hinges on. If this, then that. Without this, then no that. You know that a home sale contingency means until the buyer sells their home, they can not purchase the new home (as they need the proceeds from the sale), so think of an inspection contingency as until the inspections are done and all parties agree on the findings/remedies if needed, there is no sale, per say.
When making an offer on a home, sometimes an eager buyer pauses and thinks "What if there is something really wrong with this place...what then?" The contract we sign in NJ affords the buyer a window, usually 10 days after attorney review, to perform their "due dilligence", and any inspections they desire. This is a safeguard built in to protect the buyers who, in all likelihood, have been in the house under an hour total.
The typical road map of inspections in a transaction looks like this:
Offer is signed, goes to attorney review, comes out under contract. From then, buyer will schedule all needed inspections (home/oil tank sweep/septic etc) and performs them quickly. When done, copies of the reports are shared with the seller, and buyer asks for repairs/credits as needed depending on the findings. Seller then has to negotiate or agree to these terms, and once both parties agree, the inspection contingency is over.
Now, if you are the seller, and you are trying to make an offer on a property, you have a home sale contingency, and the sellers agent of the home you are making an offer on will usually ask "Is your sale past the inspection contingency?" This is because it's where most deals fall apart. If their seller comes to an agreement with you, only for your deal to fall apart, that puts them in a bad spot.
That's all for this week!