By waiving contingencies, you can make your offer more attractive.
Our hot seller’s market means competition is fierce among homebuyers. Some buyers are trying to help themselves stand out by waiving contingencies when writing their offers. I’ve been getting a lot of questions about whether this is a smart thing to do, so today I’ll be sharing my thoughts.
First, my job as an agent is not to tell you what to do—my job is to give you options and tell you what I see in the market. You’re the one who has to choose, and your choice usually depends on the circumstances. For example, if you’re trying to find a home that’s close to your parents, you may pull out all the stops to ensure you get it. For more common homes, you may not feel quite as eager.
Still, I see people waiving both the inspection and appraisal contingencies lately. When a home has a bunch of offers that are way beyond asking price, a buyer may say that they won’t ask for repairs (though they’ll still have the ability to back out after an inspection). In cases like this, if you’re already going to pay tens of thousands of dollars over asking price, the costs of minor repairs are negligible. Waiving the inspection helps buyers make more attractive offers while still keeping some leverage.
In our market, if a home is not appraised at the purchase price, the buyer can back out. Appraisals look at what comparable homes sold for in the past, so many homes are not appraising nowadays due to today’s rising prices. When a buyer waives the appraisal contingency, they’re offering to help pay the difference or forfeit their right to back out. This gives the seller assurance that the buyer won’t back out and helps buyers compete with cash offers, as cash offers don’t require an appraisal at all.
Waivers can be tricky to understand, and it’s even trickier to know when they should be used. If you have any questions or would like more information about this topic, feel free to reach out to me. I’d be happy to speak with you and address any concerns you may have.