It's not unusual for homebuyers to fall in love with houses and then change their minds about purchasing them later. Depending on how far you are in the process, however, it can be difficult to extricate yourself from the purchase without incurring significant expense, legal problems, or looking like an inconsiderate person. If you want to provide yourself an out for when you may have second thoughts, here are two contingencies to build into your offer that may help.
Selling Your Home First
If you currently own a home and are looking for a new house because you need to relocate or want to upgrade, you can make the purchase of the new home contingent on the sale of your old one. This isn't as unusual as it may seem. Depending on your credit and finances, you may only qualify for one mortgage at a time, so the bank will require you to sell your old home before approving you for a mortgage for the new one. Therefore, adding this contingency into your offer provides the seller with adequate warning so he or she can make the appropriate arrangements.
These contingencies typically have time limits. You must sell your home by a certain date, or the contract automatically terminates. Additionally, the seller may insist on a bump clause which lets them require you waive this contingency to keep the offer valid if another buyer comes along and expresses interest in purchasing the house. In either case, these requirements can provide ways for you to exit the transaction if you decide you don't want to continue pursuing the sale.
Homeowner's Association Investigation
The other contingency you can build into your offer is the requirement that the homeowner's association passes your investigation. This contingency is particularly useful if you're buying a condo, because how well the building is run can affect your ability to sell the home in the future.
A homeowner's association can have a major impact on how much you enjoy living in your home and the community. Therefore, it's a good idea to investigate all aspects of the organization before completing the sale. This includes inspecting financial records to ensure the association has enough money to maintain the building and/or public spaces and reading up on the rules and regulations to make sure they work with your needs and preferences. For instance, some homeowner's associations limit the type of structural changes you can make to the house, typically to ensure it conforms to the overall architectural look of the community.
Building in this contingency lets you make reasonable objections to issues with the homeowner's association and back out of the sale if you find the home or the organization is not compatible with your lifestyle.
For more information about this issue or help finding a home, contact a real estate agent.
