Homes For Sale In Miami: Use Contingencies As A Safety NetAugust 31, 2012
When it comes to buying a house in Miami, there are a lot of unknown risk factors that may negatively impact you financial well-being during and after the transaction.
Nevertheless, these dangers of uncertainty can be eliminated with contingency clauses stated in the contract of all Miami homes – these elements detail certain conditions which have to be met in order to make the purchase binding to the buyer.
An example of a commonly used contingency is the ‘mortgage contingency’, which protects buyers during the process of buying the residence. Basically, it states that the buyer shall attempt to secure a particular mortgage at or below a certain interest rate for a set percentage of the agreed purchase price by a specified date before closing.
In the event the buyer fails to secure to loan with the stated terms, he or she has the option of backing out of the contract. Additionally, the earnest deposits shall be returned to the buyer.
While the mortgage contingency provides protection for the buyer, it also protects the seller. An individual interested in acquiring a Miami should know the different ways this contingency protects the seller, such as this example: if the buyer fails to secure a loan, and “forgets” to inform the seller before a prearranged date, the former will still be obliged to purchase the abode, even without financing.
Another type of contingency is known as the appraisal contingency, which comes in two variations. Version one states that the buyer may back out from the deal in the event he’s unable to get an appraisal that’s at least as high as the seller’s asking price.
Second version states that if the buyer is unable to get a suitable appraisal, he may feel free to ask the seller for a lower purchase price. In the event the latter refuses the request, he’s automatically given the right to back out of the deal.
There are other contingencies that all homebuyers should keep in mind when buying homes for sale in Miami. Buyers and sellers should always thoroughly review the contract of any house sale to gain additional security.