There are so many unknowns when buying a house which is why you should enlist the help of an Orlando Realtor.  Because once you’ve bought it then that’s it! You’re in it for the long haul.

Using contingency clauses in your home contract to purchase will eliminate some of the uncertainty of buying a house by outlining the conditions that have to be met before closing the transaction.

Mortgage Contingencies Protect The Buyer

The most common contingency in residential real estate contracts is a mortgage contingency. In a nutshell, it states that if the buyer can’t secure the financing he can back out of the contract.

You can keep the verbiage simple or get very specific with all the details like; stating the type of loan [traditional, VA loan, FHA loan, etc.] You can even state what interest rate you’d be willing to go up to.

A mortgage contingency in a contract is an absolute must when buying a home unless you’re paying cash for the home.

Mortgage Contingencies Also Protect Sellers

In the previous paragraph, we learned how a mortgage contingency can help a buyer. However, sellers are also protected by mortgage contingencies. Here’s how… If a buyer goes past the predetermined amount of time as stated in the purchase contract to obtain financing, the buyer is still obligated to buy the home or they will have to forfeit their earnest money deposit to the seller.

Sellers can also demand that the buyer must have their financing in place several weeks before the closing in order to prevent the buyers from backing out at the last minute.

Appraisal Contingency

Mortgage contingencies and appraisal contingencies go hand-in-hand. There are a couple of different ways appraisal contingencies are implemented. In one version it states that if the buyer is unable to get an appraisal that is at least as high as the selling price, the buyer can then back out of the deal if they wish. The other option they have is to ask the seller to lower the sale price of the home. At this point, the seller can either agree to the price reduction or back out of the deal.

Inspection Contingency

Inspection contingencies provide the buyer with a pre-determined amount of time to take care of all the inspections they want to be performed on the house [usually 3 to fourteen days] prior to the closing. If the inspections uncover any issues or problems with the home, then the buyer can either back out of the deal or try to get the seller to fix whatever issues are in question prior to the closing.

Depending on what state you’re in, there are many other possible contingencies you can add to the purchase contract such as home insurance and mold inspection contingencies.

Put Your Orlando Realtor To Work!

The main thing is to pay attention to the fine print. The way a contingency is worded is crucial, it’s not there for decoration. If you’re not careful, you could overlook deadlines, end up losing money, and even get sued.

You should never enter into a real estate transaction without hiring an experienced Orlando Realtor in your corner. An experienced realtor will walk you through the entire home buying process and will make sure that you are protected in every way possible.

With Orlando home prices on the rise and increasing demand, Orlando Real Estate has experienced a stellar 2015 in home sales and it’s not over yet. Projections for 2016 are expected to continue on the same track and may even be better according to many top Orlando real estate agents.

There are 3 major factors that are currently creating this “Perfect Storm” in the world of Orlando real estate.

1- It’s A buyer’s Frenzy! Between Investors, first-time homebuyers, boomerang buyers [people who have lost their previous home to short sale or foreclosure], and traditional buyers, Orlando homes are not lasting very long on the market after the listing hits the MLS.

The amount of people applying for FHA loans, [loans that are backed by the Federal Government] is at an all-time high. These loans are mostly favored by first-time homebuyers because of the down payment assistance. Record low mortgage rates also contribute largely to the record numbers of people applying for home loans in Orlando.

2- Skyrocketing Home Prices. Single-family homes in Orlando as well as condos sold for an average of 11% over the original purchase price in the 1st half of 2015.

We are now seeing the biggest gains in Orlando’s real estate appreciation since 2007. These days it’s not uncommon for a home to sell above the asking price in some Orlando neighborhoods. According to the NAR median sales of existing homes surpassed the previous peak we experienced in 2006 just before the bottom fell out.

3- Limited Inventory. Sellers have a lot less competition right now which forces homebuyers to compete for a limited supply of Orlando homes. Recent distressed property sales [short sales and REO properties] only accounted for less than 7% of all real estate sales in Central Florida. This is the lowest since 2011. Back in 2011, the overall distressed property sales in Central Florida made up almost 50% of the market.

Looking to sell your Orlando Home For Top Dollar?  call or text Jenny Zamora at 407-902-7750 to find out how much your home will sell for.