In this Knoxville Insider Issue…

🌤️ Real Estate Edition - Common Questions: Installment 2
 

Common Questions: Installment 2

Q1) What are contingencies, and how do they work?

Contingencies are specific conditions or requirements that must be met for a real estate contract to be completed. The most common types of contingencies include:

• Financing Contingency: This requires the buyer to secure a loan to purchase the home. If the buyer cannot obtain financing, they can withdraw from the deal without losing their earnest money.

• Appraisal Contingency: This protects the buyer if the home's appraised value is lower than the agreed-upon purchase price. If this happens, the buyer and seller can renegotiate the price, the buyer can choose to pay the difference, or the contract can be terminated.

• Home Inspection Contingency: This allows the buyer to have the home inspected by a licensed professional. If significant issues are found, the buyer can negotiate for repairs, request a price reduction, or choose to terminate the contract.

Q2) What is earnest money?

Earnest money, also known as trust money, is a deposit made by the buyer to demonstrate their serious intent to purchase a property. This deposit is typically credited to the buyer at closing. If the transaction falls through due to contingencies in the contract, the earnest money is refundable. However, if the buyer backs out for reasons not covered in the purchase agreement, they may forfeit the deposit. In such cases, both parties will negotiate the termination in good faith to reach a resolution.

Q3) What is the process of buying a home?

The home-buying process typically begins with speaking to a lender to discuss your financial situation, creditworthiness, and budget. After getting pre-approved for a mortgage, you can start looking for a REALTOR. It's important to meet with a few agents and choose the one you're most comfortable with—big-name agents aren’t always the easiest to work with, so do your research! Once you have an agent, you can start touring homes. Your agent will guide you through making an offer, conducting home inspections, negotiating repairs, getting the home appraised, and finally closing with the title company. If you're using a lender, the process can usually be completed in about 30 days.

Q4) What should I look for during a home inspection?

During a home inspection, pay close attention to any structural issues. Review the inspector’s notes on the roof, foundation, walls, windows, and doors. Moisture or signs of organic growth should be prioritized. If the inspector suggests having a licensed professional evaluate potential issues, take it seriously—what may seem like a minor problem can quickly become a major one. Remember, the inspector works for you, the buyer, and is your best resource for understanding the home’s condition and determining what repairs, if any, should be requested.

Ask a Realtor😀 

Bring on your real estate questions! I’m excited to answer every single one!

This Real Estate Edition Issue brought to you by Barbara Newton. She can be reached at [email protected]

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