The Contingency Period – Your Listing is now “Active with Offer” in MLS
Once the offer is accepted the contingency period begins. All of the conditions in the offer must be met before it can become firm and the deal finalized. Most offers contain the following conditions:
- Inspection Contingency: A professional home inspector will thoroughly check the home and let the buyers know if there is anything to be concerned about. The inspection will be scheduled by the buyer’s agent. Typically 10-14 days.
- Financing Contingency: Mortgage approval for the purchase will need to be obtained by the buyers for this condition to be met. Typically 25 to 40 days.
- Appraisal Contingency: Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate. Typically 28 to 43 days.
- Home Sale Contingency: If your buyers still need to sell their current property they might make this condition part of their offer. Your agent will guide you and help you decide whether to accept an offer with this condition or not, and what type of timeline you will allow if you do accept it. In Wisconsin most offers with a home sale contingency will be accepted with a bump clause, so your agent will continue to market your house to other buyers, who can then “bump” this offer out of the way.
Depending on the outcome of the inspections, one of two things may happen:
- Either each milestone is successfully met and the conditions will be removed, bringing you one step closer to the closing; or more likely
- The buyer, after reviewing the property and the inspection report, requests a renegotiation of the terms of the contract (usually some repairs, closing cost credit or price).
How do you respond objectively and fairly to the buyer when a renegotiation is demanded, while acting in your best interests? This is when a professional listing agent can make a real difference in the outcome of the transaction. Having dealt with many property sales in the past, we negotiate on your behalf and with your best interest in mind.
When all of the negotiations have concluded, conditions have been met and the appropriate paperwork is signed and submitted the offer is considered firm.
All Contingencies removed – Your Listing is now “Pending” in MLS
After the bank has received the report from the appraiser and the underwriter has reviewed the report and is satisfied the bank will now issue a “loan commitment letter”. Now that all of the conditions have been met the offer is pending and only awaiting closing – congratulations you just sold your house! All that’s left to do is to get ready to move on closing day.