The Michigan home-buying process often involves many moving parts. Sometimes, you need certain elements to come to be before you may move forward with buying a home you have your eye on. In real estate, contingent offers are offers you make on a home that hinge upon other specified circumstances coming to be first.
Per NerdWallet, when you make a contingent offer on a property, you are essentially making an “if-then” proposition. Common contingencies used in real estate are as follows.
Home sale contingencies
If you are like many homebuyers, you may not have enough money available to you to buy a new home until you sell your current home first. In this scenario, you could make an offer that is contingent upon your own house selling within a particular timeframe.
Home inspection contingencies
A home inspection is an important part of the home-buying process and helps you avoid purchasing a property with major defects. A home inspection contingency asserts that you are going to buy a home as long as the inspection does not reveal significant issues with it.
Mortgage contingencies
You may need to use a mortgage contingency when you make an offer on a home dictating that you are going to buy it as long as you receive a loan that allows you to do so. You may need to make a mortgage-contingent offer on a property even if a bank or mortgage lender has already pre-approved you for a loan.
These are some of the most common contingencies used in residential real estate. However, this is not a complete list of all contingency types you may need to consider or utilize.
