Fremont Buyers – Use Contingencies Wisely

Part 3

I have recently had many clients ask about what contingencies are in a real estate purchase agreement and how best to use them so they are protected and get a good deal. So I have put together a series of blogs to explain what they are and the best way to use them.

 Everyone is familiar with the conversation where the other person says, “Yes, but...” This person is agreeing with you but only if certain conditions are met. Well a purchase agreement is similar in that you are agreeing to buy a property subject to certain conditions being met. The conditions you set are called contingencies.

It is very uncommon to have a purchase agreement in Fremont without contingencies. In fact, contingencies are an essential part of many offers for homes in Fremont. In general, contingencies are added to protect you (the buyer) but may also serve to protect the seller.

All of the contingencies of a purchase agreement must be met before a Fremont home sale can be competed. In this first series I discussed some examples of contingencies and the most common ones in a Fremont purchase agreement. In part two I discussed who writes contingencies, and who they protect. In this blog I will discuss how contingencies can be used as deal points.

Contingencies Can Become Deal Points

Naturally, you will want to have contingencies that benefit you (the buyer) and want to exclude those that protect the seller. This is therefore a process of negotiation where contingencies become deal points, which you can influence, the actual cost of the transaction.

A deal point is a specific point on which the deal depends. For example, you want the sellers to replace the broken sprinkler system. So you include a contingency stating that the sellers must repair it. If the sellers refuse — perhaps they have been watering the lawn by hand and are unwilling to fix it for the buyers.

Now you have a deal point. What are you going to do?

Well, this depends on how important the sprinkler system is to you. If you feel that you can’t live without it and are unwilling to budge, you can refuse to remove the contingency. The seller can either accept the offer or reject it. If the sellers accept, you’ve got your sprinklers. However, if they reject, you’re not getting your new home.

A better way of dealing with this type of situation is to calculate the cost of repairs and adjust the contingencies to compensate. For example you may retract your contingency for the sprinklers and insist that they leave the appliances you really like. Perhaps the sellers were not looking forward to taking them anyway and are willing to compromise on this point. In which case, although you will need to get the sprinklers fixed, you have saved several hundred dollars on the purchase of new appliances.

Thank you for taking the time to read the information I have made available to you. This information is brought to you by your Fremont real estate expert Clyde Brown.  If you are considering buying or selling property, planning to relocate, looking for Fremont homes for sale, or looking for any other information about real estate in the Fremont real estate market, or the surrounding areas, please visit the most complete website dedicated to everything real estate related www.ClydeBrownHomes.com.

If you or someone you know are in need of a competent and experienced Bay Area Realtor, or have real estate or mortgage related questions, please feel free to contact me I will be more than glad to answer your questions. Call me at 800-839-0665 or email me at Clyde@ClydeBrownHomes.com. For all your East Bay cities needs including Fremont, Newark, Union City, Hayward, Oakland, Santa Clara, Milpitas, Dublin, Livermore, Pleasanton, and San Ramon. Clyde Brown Legacy Real Estate & Associates.