Contingencies are a big part of your offer as a buyer. Knowing what they mean, how they protect you and the timeline they set is important.
Think of the word contingency as OPPORTUNITY TO BACK OUT (WITHOUT PENALTY).
>Most offers begin with a deposit due to escrow in 3 days
>This is the sellers collateral for removing their property from the market (in PENDING status)
>The 3 standard contingencies are
*INSPECTIONS - typical timeline is 17 days from full acceptance
>You have from full acceptance till day 17 of escrow to do your home inspection, termite
inspection and any other inspection you want and back out AND get your deposit back
*APPRAISAL - typical timeline is 17 days from full acceptance
>You have from full acceptance till day 17 of escrow to have your Loan Officer order an
appraisal and get it back - if the results come in different than you expected you can cancel AND
get your deposit back
*LOAN - typical timeline is 21 days from full acceptance
>You have from full acceptance till day 21 of escrow to have your Loan Officer submit your file
to underwriter and get as many conditions cleared prior to the 21 days elapsing. If your loan gets
declined before day 21 you can cancel AND get your deposit back.
***Cash offers typically DO NOT have appraisal or loan contingencies
***These timelines are the TYPICAL contingencies - in a sellers market, many times buyers try and shorten, or remove these contingencies as ways to enhance the appeal of their offer to the seller. However this comes with a risk to the buyers deposit.