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What Does Removing the Loan Contingency Mean for Homebuyers?

HomeLight

If you’ve been shopping for a home, you’ve likely come across the term “loan contingency,” and you may be considering including this clause in your purchase offer. Or perhaps you’ve already made a loan-contingent offer, and you’re wondering about contingency removal. What is a loan contingency?

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How Long Can a House Be Contingent?

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Here are some of the most common contingencies you might encounter: Home sale contingency: This allows the buyer a specified amount of time to sell their current home. Inspection contingency: This gives the buyer the right to have the property inspected within a certain timeframe.

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What’s the Deal with Making a Cash Offer on a House?

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The lender usually also requires additional contingencies before they’ll approve the loan, such as an appraisal contingency to make sure the home is worth the amount they are loaning you to buy it, and an inspection contingency to see if there are any potential problems.

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What Buyers Need to Know About Making an Offer on Active Contingent Listings

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Inspection contingencies. Inspection contingencies mean that a buyer can get a home inspected before the deal goes through, and can back out of the purchase with earnest money intact, depending on what the inspector finds. Inspection contingencies can be waived. Appraisal contingencies.

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How to Sell Your House Without a Realtor: 14 Steps to Selling FSBO

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When reviewing an incoming offer, you’ll take into consideration the overall offer terms, such as: the buyer’s ability to qualify for a home loan. inspection and loan contingency time frames. Renegotiate with the buyer’s agent based on inspection findings. whether it makes sense counter to a higher purchase price.

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Use These 8 Strategies to Get Yourself a Home in 2022’s Real Estate Market

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Speaking of contingencies, Peterson says the fewer, the better. If you must include contingencies, such as a loan contingency or appraisal contingency to secure a mortgage, try to include as few as possible.