I'm a new home buyer from Bay Area and trying to get pre-approvals in place before I start making offers. I have strong financials and will be doing a >50% down payment for a Condo. DTI < 33%
I've been constantly getting advised by my real estate agent (& i've discussed this with multiple agents) that if I add any contingencies to the offer, it won't stand a chance in the bay area market.
If that is the case, how do I protect myself from challenges which could be found during home inspection / pest inspection related contingencies?
It will depend on your risk tolerance and what is most important to the seller. There are other ways to get your offer accepted that can be appealing to the buyers like non-refundable deposits, higher deposit amounts, shorter timelines and others. With a condo it might be less risky because of HOA maintaining the major capital expenditures. Have you put in offer with contingencies and lost out? That would be a first step.
Real Estate Agent · San Jose, CA · Member since 2023 · 182 posts · 104 votes
1y
Hey Mayank. Generally speaking it is somewhat true in the Bay Area (unfortunately). However, contingencies are there to protect you, and it should be your agent's job to vet the property and your specific situation to see whether a contingency is needed. In my most recent 2 deals, both had contingencies and we still won the offer. In one case, we had contingency, and we weren't even the top offer, although very close. It all depends on how your agent is able to convey the reason of the contingency and negotiate with the listing agent (As listing agents, they want to mitigate risks for their clients as well).
For Condos in the Bay Area, you could be exposed to higher risk because of the new SB326 Balcony Law. Your agent should check whether the HOA is compliant. Is the HOA sufficiently insured? How does the financials of the HOA look? etc...Hope this helps.