Buying a residential property can be stressful and expensive. You have a lot at risk during a transaction to buy real property in New York. Once you make an offer on a property, you are legally bound to follow through with the purchase.
If you cancel the transaction, the seller can sometimes keep your earnest money. Given that people frequently put at least 1% of the purchase price down as earnest money when making an offer, that loss could be substantial.
Obviously, you don’t make an offer on a property that you wouldn’t want to buy, but sometimes situations changes in unpredictable ways. You shouldn’t have to worry about losing thousands of dollars because of an issue you have no control over, like finding an undisclosed defect in the home before closing. How can you protect your earnest money when making an offer on real property in New York?
Contingencies give you an opportunity to back out of the transaction
Much of the language in a purchase offer establishes your obligations to the seller. However, you are also in a position to state certain expectations as a buyer. For example, you may only want to move forward with the purchase of the property appraises at an appropriate value. You may also need to wait to close until you are able to sell your current house.
Contingencies are inclusions in your contract that give you an opportunity to cancel the transaction without penalty. Some of the most common contingencies include requirements for inspections and appraisals, although contingencies that protect a buyer if they cannot sell their current home or obtain a mortgage are also popular inclusions. Recognizing when completing the transaction would not be beneficial for you can help you determine what contingencies you need to include in your offer.
It can be hard to focus on the big picture when you are in the middle housing hunt
It is easy for homebuyers to get swept up in the high stakes and hide these worlds of residential real estate sales. You may not think things through as clearly when you feel intensely excited about a certain property or frustrated after multiple failed offers.
Having the right support during a real estate transaction will make it easier for you to protect yourself and your earnest money.