Buyer Contingencies or no Contingencies that is the Question?

Contingency Plan
When purchasing a home in Utah there are several buyer contingencies written into an offer. These continencies allow for the buyer to withdraw from the contract without losing their deposit. These are:

1) Inspection. Allows for the buyer to have the property inspected by an inspector of their choice.
2) Appraisal.
3) Loan Approval.

Thus the buyer can withdraw from the contract if the inspection is bad, the property does not appraise for the purchase amount, or if they are refused a loan.

This is all fine until the housing market is hot like it is at the moment. In a hot market the seller has the upper hand, and because of this can ask for their own set of conditions. One of the things we are seeing at the moment is the seller asking the buyer to remove all contingencies from their offer. This means that the deposit (called earnest money) becomes hard when the offer is accepted, so no matter what happens the seller gets to keep that money.

In a hot market, when competing against other buyers you may need to give up some of your rights in order to get a house, but this needs to be carefully considered and you need to know the potential consequences before making that decision.

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