Contractual Rights During The Homebuying Process FSBO that you NEED TO KNOW. Are you looking to sell your home on your own? Make sure you are aware of what contractual rights you and your buyer have during the homebuying process. As local real estate experts, we truly care about the homeowners in our community. Because we care, we want to pass on some useful information to homeowners like you to help you avoid the common pitfalls associated with selling your property on your own. There are a lot of moving parts to make your sale a successful one from start to finish so our hope is we can contribute to your success and make your for sale by owner experience a great one! A contingency is a contractual right allowing a party to cancel a contract (without penalty) either before or after a specified timeframe. But remember, these timeframes are not set in stone and can be negotiated prior to going into contract. However, Standard Buyer Contingencies that you will most likely have to navigate are inspection, appraisal, and loan approval. 1) Inspections. 17- days for the buyer to complete any inspections and investigation (i.e., home inspections, reviewing the title report). Only the buyer can cancel if the buyer is not fully satisfied with the result of the buyer’s inspections and investigations. However, remember that the timeframes can be negotiated and that is determined by the market conditions. 2) Appraisal. 17-days for the buyer’s lender to complete an appraisal. Only the buyer can cancel if the appraisal amount is lower than the purchase price unless you’ve previously negotiated something different, for example, a no appraisal contingency or possibly gotten the buyer to agree to pay a specified amount over the appraised value not to exceed the purchase price. Again, there is a lot more involved with this, so be sure to protect yourself. 3) Loan Approval. 21-days for the buyer’s lender to ‘approve’ the loan. Only the buyer can cancel if the lender does not approve the loan (i.e., the lender does not provide a loan commitment letter or other confirmation of final loan approval). Also, be aware of these less common contingencies that may be part of a purchase agreement:1) Sale of buyer’s current home. This contingency is usually processed with the CAR form “Contingency for Sale of Buyer’s Property”, which offers several timing options. Sometimes the Seller only has 17-days to find a new home or cancel, but sometimes the seller checks the box that the contingency continues until the seller actually closes escrow on the replacement home. 2) Seller finds a replacement home. This contingency is usually processed with the CAR form “Seller’s Purchase of Replacement Property”, which offers several timing options. Sometimes the Seller only has 17-days to find a new home or cancel; but sometimes the seller checks the box that the contingency continues until the seller actually closes escrow on the replacement home. This only scratches the surface of the FSBO process. If you find the process a bit too much to handle on your own with everything else you need to focus on in life like family and work responsibilities, give us a call and we would love to remove some of the stress from the situation and give you the best possible outcome for your home sale. As always make today the best one yet! Again, this is Kimmy Rolph with Berkshire Hathaway Fox and Roach. Kimmy Rolph sells The Main Line and local areas.
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