4 Must-Write Contingencies

Contingencies are an important component of writing an offer on your potential new investment property. If not met, these are conditions of your purchase will void you purchase contract. They are the ultimate protection in ensuring you don't end up purchasing a property in anything less than your ideal circumstance. 

Here are 4 Must-Write Contingencies.

Never buy a property that hasn’t been looked over by a professional inspector no matter how handy you think you are. Your offer to purchase should include a condition that you get the property checked out. This prevents you from unknowingly taking over a home with termites, mold, crumbling infrastructure, and other potential disasters.

Your lender’s pre-approval states very specific terms for your mortgage. Terms, like an interest rate and loan amount, that you’re comfortable with. Should your financing not come through, for whatever reason, exactly as you’ve anticipated, a loan contingency will protect you from having to go through with the purchase.

A title contingency allows you, the buyer, to certify your potential new property is free of any liens, unpaid property taxes, un-permitted additions, or deed errors before purchasing. A clean title will ensure that you - and any potential buyers after you - have full rights to the property -- a must have before closing.

An appraisal is necessary in order for you to get financing. So this contingency should be a non-negotiable for you when working with a seller or a bank on an REO property. The amount your lender is planning to loan you is based upon the assumed worth of the property. If the property's appraisal actually comes in lower than expected, the bank will be revising the amount they plan to loan you.

When you team with an experienced real estate agent, they'll be able to walk you through all the necessary contingencies for your particular situation. Never having to experience buyer's remorse is just one of the many benefits of working with a top agent.