The Use of a Real Estate Contingency Clause Gains Popularity in Market Shift

In the hot real estate market we recently experienced, using a real estate contingency clause was not a common practice. However, with the recent shifts in the market and buyer behavior, we will see a rise in the use of contingency clauses in sales contracts.

Contingent means “depending on certain circumstances.” A real estate contingency clause can be written into a sales agreement so the buyer can explore or satisfy certain conditions before they are ready to move forward with the sale. It provides the buyer with a safe exit strategy preventing them from losing their earnest money.

The common real estate contingency clauses include:

Mortgage Contingency

The buyer has a specific time to obtain the necessary financing approval for the home purchase.

Title Contingency

The title company will do a title search of the property for the buyer’s review. If there are any objections to the status of the property, the seller will have to rectify the issues to close the home.

Home Inspection Contingency

A specified period is allowed for the buyer to have a home inspection and report the findings to the seller, along with any repair requests. The buyer can also terminate the sales agreement. Reasons to terminate might include if the inspection is unsatisfactory or the seller refuses to make or compensate for repairs.

Home Sale Contingency

If the buyer needs to sell their current home to purchase a new home, they may elect to have this contingency written into the agreement. The parties will negotiate a deadline to determine an acceptable date for the buyer to sell their home.

Appraisal Contingency

An appraisal contingency ensures that the home appraises for the indicated sales price or a minimum sales price. If it does not, the buyer can cancel the contract. This contingency is commonly a lender’s stipulation if the buyer is financing.

Homeowners Insurance Contingency

The buyer must apply for and obtain a homeowners insurance policy on the property. Either party can terminate the contract if they cannot attain the insurance. 

Any real estate contingency clause’s requirements must be satisfied before a sale can close. The contingency clauses are included in the buyer’s initial offer or added throughout the negotiation phase.

These contingencies protect either the buyer or the seller by providing a way for a designated party to back out of the transaction if certain conditions can’t be met. 

There are several benefits to using contingencies in a real estate sales contract, both for the buyer and the seller. 

Some of the most common benefits include:

Protection for the Buyer 

Contingencies provide a way for the buyer to back out of the transaction if certain conditions are not met, such as if the buyer cannot obtain financing or if the property inspections aren’t satisfactory. This helps protect the buyer’s investment and ensures they are not stuck with a property that does not meet their needs or expectations.

Protection for the Seller

Contingencies can also protect the seller. For example, a mortgage contingency ensures the buyer can obtain financing approval by a specified date. This helps protect the seller from the possibility of the sale falling through if the buyer cannot secure funding.

Negotiating Tool

Contingencies can be a negotiating tool. For example, a buyer may be willing to offer more for a property if they know they will have a mortgage contingency included in the sales contract, which gives them added protection in case they are unable to secure financing. Similarly, a seller may accept a lower offer if the buyer is willing to remove certain contingencies, such as a home inspection contingency.

Closing Date Protection

Some contingencies also specify the property’s closing date and are helpful for both buyer and seller to protect their interest. For example, a buyer may include a contingency that allows them to cancel the contract if the closing date is delayed beyond a specific date, ensuring they do not lose out on other opportunities. On the other hand, a seller may include a contingency that requires the buyer to close by a specific date, which gives the seller a sense of security in case they have other transactions lined up after this one.

Legal Safeguards

Contingencies also serve as a legal safeguard, legally enforceable in the contract. In addition, they provide a clear understanding of the terms and the requirements of both the buyer and the seller, which can be helpful in case of any dispute.

Contingencies are essential to a real estate transaction and provide valuable protection for buyers and sellers. They help ensure that the transaction goes smoothly and that both parties are satisfied with the outcome.

Contingency Period

Each contingency should have a designated timeframe to complete. The type of contingency determines the time. The requirements will vary depending on the kind of contingency. The responsible party must meet them within the timeframe unless both parties agree to extend. All rights are forfeited if the contingency period expires without a response or an extension.

Why are contingencies coming back?

Before the post-pandemic hot real estate market, a real estate contingency clause was not an unusual addition to any offer. However, because the inventory of homes was so scarce during the past few years, many buyers were excluding any contingency to have their offers even considered in multiple offer situations.

The competitiveness of the market spurred the trend of fewer or no contingencies. With limited inventory, buyers often faced a multiple-offer situation on homes they wanted to buy, causing many buyers to choose to waive many contingencies in their offer. As a result, sellers are more likely to accept an offer with fewer contingencies to ensure the sale of their home.

With interest rates at historic lows, buyers were more likely to secure financing or find finance programs without selling an existing home. In addition, many lenders began offering more flexible underwriting guidelines, which made it easier for buyers to qualify for loans.

As the market is settling, a real estate contingency clause has again gained importance in a real estate transaction. For buyers, a contingency can help ensure they are able to obtain financing and that the property is in good condition before closing. For sellers, contingencies can provide a way to back out of the transaction if the buyer cannot secure financing or is dissatisfied with the home inspection.

What should you know about a real estate contingency clause?

• Contingencies are conditional. 
• Contingencies should have a timeframe attached to them.
• If deadlines pass, the rights to the terms of the contingency can be voided.
• Depending on the terms, a seller may still be able to market their home during a home sale contingency.
• Home inspection contingencies can be negotiated after the inspection.
• Certain contingencies can slow down the purchase process.
• The more contingencies included in an offer, the more challenging the negotiation can be. 
• Most contingencies are common and do not derail the homebuying process.

When a seller receives an offer with contingencies, they must weigh the pros and cons of accepting the offer. While taking an offer with fewer contingencies may be tempting, it is important to consider any potential risks and ensure the included contingencies provide adequate protection. Your real estate professional will be able to analyze the offer and help you negotiate to get your home sold. 

To understand the closing process, read this previous blog post.

Fall-through rates

There is no reason for a seller to be alarmed when they do receive a contingency. According to statistics, the cancellation rate of sales agreements is less than 4% of sales contracts, as reported in this recent article.

Contingency clauses will become more frequent and common than over the past few years. A real estate contingency clause can play a vital role in a real estate transaction for both buyers and sellers. Buyers and sellers can confidently enter a real estate transaction when they understand the contingency clause and terms. 

Don’t let real estate contingencies trip you up; contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Berkshire Hathaway HomeServices – Fillmore Real Estate. As a Brooklyn real estate agent with over 35 years of experience, I help Brooklyn Homebuyers and Sellers with advice and resources. Reach me by phone at (718) 253-9500 ext. 1901 or by email at [email protected].

In honor of Valentine’s Day, sellers should take this month to highlight what they love best about their homes for sale. Instead of just focusing on the square footage, buyers will get the chance to see what makes your Brooklyn real estate surprisingly special. The best way to project a loving image is to let Cupid take over and shoot your home — with a camera, of course.

As a seller, you constantly hear tips about de-cluttering and depersonalizing a home that’s on the market. However, when you’re taking pictures to post online, be sure you capture the details you love most about your home, because buyers are likely to love them too. Below are a few photography tips to get you started:

Capture the heart of your home. Ensure that you get pictures of all the living spaces, from the kitchen and living room to the finished basement and backyard. Any place that a family will spend most of its time together should be highlighted.

• Make sure you have good lighting. Photograph on a day when there is a lot of natural light coming through the windows. Also be sure to turn on all inside lights and lamps — this gives your home that cheery, glowing feeling.
• Highlight your home’s best features. Do you love your wrap-around porch, built-in bookshelves, shaded backyard or beautiful stained glass windows?  Be sure to showcase each of those unique features in the photos of your home. You might be surprised at what catches the eye of a potential buyer.
• Double-check your online upload. Take care to verify the online uploading of your photographs. Carefully read website parameters for picture size and captioning. This will probably be many potential buyers’ first impression of your home, so you definitely want to make it a good one!

Don’t just quickly snap pictures using your phone. Be sure to employ a little love and effort when capturing your Brooklyn real estate. Then you’ll highlight its best features and pass on that heartwarming image to potential buyers.

If you’re looking for a Brooklyn real estate agent who will photograph your home to show off its best features and market it extensively online and off, please call me, Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected]

Back to School!

If you’re looking to purchase a new home, then you have a list of priorities. When looking at Brooklyn homes for sale, families with young children consider proximity to schools and quality of school districts as two of the top concerns on their home buying checklist.

With “back to school” on the brain, your top priority when looking at Brooklyn homes for sale might be how close a home is to schools. Before you purchase property near a school, take the following considerations into account.

Top-notch education – If the local school is the best in the surrounding area, then your property value could increase. Houses in your Brooklyn neighborhood will be in high demand because families will want to ensure their children are included in that district.

• Around the block – Living near a school could be beneficial if you have younger children you can walk with. Additionally, your proximity will allow you to react quickly if school closes early or your child gets sick.
• Noise alert – With cars whizzing by and children walking past, you might have to deal with daily commotion and traffic. Depending on how close you live to the school, you could also be subject to noise from recess, after-school practice and Friday night football games.
• School view – Living directly across from a school could actually decrease the value of your home and increase the litter. A view of a high school isn’t as good as a view of a quaint, tree-lined street; and the constant foot and car traffic could mean more mess in your yard.
• Neighborhood watch – Do your research. Some Brooklyn neighborhoods surrounding schools may have better relationships with the school. If your neighborhood civic association meets monthly with a school, you’ll be able to voice any concerns you might have.

While there are many pros and cons to living near schools, you need to decide what is best for your family.

Whether you’re interested in Brooklyn homes for sale near or far away from schools, I can help you find a home that fits your priorities.  Call me Charles D’Alessandro your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9600 ext 206 or email me at [email protected]

Sometimes, thought provoking questions come in from readers with national or Brooklyn homes for sale. I thought I’d answer a few of the questions I’ve received recently. Maybe you have some of the same questions.

Is a mural considered a personal touch or a selling point?

This is a hard question to answer. It really depends on the mural, the room it’s in, and if it could be considered part of the décor. For instance, would a rooster painted on the wall of a country-style kitchen add or detract?

If you have a real estate agent, ask his or her opinion. If you don’t have an agent, I strongly suggest you hire one to walk through and give you suggestions.  For most Brooklyn homes for sale, the answer will be “paint over it.” However, you never really know when an image might be that extra touch that makes the room special.  So, get a professional opinion from someone who can actually go to your home and see it.

Some murals can add to the room, such as whimsical rabbit murals in a child’s bedroom. Others can severely detract from a room, such as a large mural of Elvis on the bathroom wall. Tons of people like Elvis, but I’m not so sure they’d all like an image of him in the bathroom.

On a side note, one of the good things about having an agent is that he or she just might know a really big Elvis fan who would love the home as is.

My budget is really tight. I read about home staging, but I can’t afford it. Is it absolutely necessary to sell a home?

No. Real estate agents often talk about that “extra touch.” Home staging is one of those extra touches. If your budget is severely limited, don’t break the bank to have a professional stage your home. Although I do suggest staging your home, a cheaper alternative is to borrow a book on home staging from your local library (free), or buying a book on home staging ($40 at the most). Much can be done by you once you have the right information.  Or, hire a real estate agent, like me, who is a professional stager.

I’m getting ready to put my house on the market and am trying to make sure all the repairs are done. Should I hire a home inspector before or after I do the repairs?

Hire the home inspector first. The inspection report will include an overview of needed repairs, as well as an estimate of what those repairs will cost. This way, you can better prioritize the repairs rather than using a “hit and miss” approach.

Thank you all for your questions.  I hope my answers are helpful. With Brooklyn homes for sale, the most important advice I can give is to remember that no home is exactly alike. Everything has a unique selling point and unique selling detractor. Finding out which is which can make all the difference.

Have questions of your own?  You can add them as a comment here, email them to me at [email protected] or call me at (718) 253-9600 ext.206.  I promise to answer promptly!

If you’ve thought about buying a Brooklyn home for sale, you have to be wondering, “Is it ever going to be a good idea?” I understand; there’s an endless stream of media pouring out bad housing news. It’s discouraging to say the least if you’re a homebuyer or a home seller.

Yet, the problem with the news from the home buying standpoint is that it focuses on profit. The media says, “You can’t make a profit from buying a home.” They talk about prices dropping and more homes hitting the market, among other things. What they miss, however, are the real reasons most people buy a Brooklyn home for sale.

It’s your home. Period.

You can do what you want with it. You don’t have to worry about whether painting a mural on the wall will get you an increase in rent. You don’t have to deal with the noisy people who just moved into the apartment above you, who obviously brought a zoo because something’s pounding on your ceiling all the time. You can paint the walls black and nobody can say “Boo” about it, because it’s your home.

Fixed-rate mortgages stay put.

Unlike rent, which can go up and up and up, fixed-rate mortgage loans stay the same. They work exactly like they sound; the rate you start at when you buy your Brooklyn home for sale is the rate you end at when you finish paying off your mortgage.

You can eventually stop paying out.

Rent will always be owed. At no time in the future will your landlord say, “You’ve paid enough rent. You don’t have to pay anymore.” Mortgages, however, will eventually be paid off. Therefore, while renters pay for 15 years and then must continue to pay, homeowners, who have a 15-year mortgage, can pay for 15 years and then stop.

It’s your castle.

Nobody owns it but you. There’s a certain pride to owning a home that far outweighs profit. The excitement from making a profit, however small or large, is a fleeting, momentary thing. When you buy a Brooklyn home for sale, you’re buying a castle – a safe haven where you can get away from the world; a place where you can relax and be comfortable.

If you’re ready to find your castle, I can help. Call me at (718) 253-9600 ext 206 or email me at [email protected] for more information.

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog Winning the War on Brooklyn Homes for Sale

The national and Brooklyn real estate markets are constantly fluctuating, falling somewhere between more inventory and lower prices and less inventory and higher prices. People are often frightened when the home inventory rises, but a declining real estate market may just be the perfect time to find your next home.

Here are 4 reasons why you should consider buying Brooklyn real estate in a down market.

1.      Inventory. When the market is down, more homes are for sale. This means you have more homes to choose from, which makes it easier to find a home in your dream neighborhood or closer to work or school.

2.      Negotiation. There’s a reason down markets are called “buyers’ markets.” Sellers want to sell their homes, and they are often willing to do whatever it takes. This means you have the advantage and can buy a home for a great price. You can also ask the seller for other incentives like paying all or a portion of your closing costs.

3.      Mortgage Rates. When the real estate market begins falling, interest rates get cut. This can mean considerable savings for you over the course of your mortgage. You can even buy a larger home within your price range than you can when the market is booming.

4.      Investment. Even though doom and gloom is forecasted in a down market, your Brooklyn home will still most likely go up in value or at least retain its value. Keep in mind that your home is your most personal investment. It’s a place where you will create memories and maybe even raise a family.

If you’re considering buying a Brooklyn home, let me help you find a wonderful home at a great price. Call Charles D’Alessandro of Fillmore Real Estate Today at (718) 253-9600 EXT 206 or email me at [email protected]

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog Buying a Brooklyn Home: Death, Taxes and Closing Costs Guaranteed

Setting the asking price for their Brooklyn homes for sale is one of the most important decisions homeowners have to make in the selling process.  Why is it so important?

• You only get one chance to make a good first impression. With so many competing Brooklyn homes for sale, yours has to pop out immediately as a good value or buyers will move on, unlikely to return. You get one stab at your home’s debut, and it’s easy to blow it.

• Set the price too high and you could hurt your chances of selling your home. The amount of traffic a home gets in the first week on the market is about 5 times what it gets the following weeks.  The traffic continues to decrease every week. You might say, “Well, I’ll just lower my price.”  This hurts almost as much as it helps.  It conveys to buyers (the few who are still considering your home) that your home was overpriced and may still be.

• Setting the price too low can be almost as harmful. Buyers who are looking in a specific price range may not consider your home because of the low price tag.  They assume it will not fulfill their needs or worry that there’s something wrong with it.

How do you know what that magic number should be for your home?  Here are 3 factors to take into consideration when setting your asking price:

1.Neighborhood sales prices: Recent closed sales in your immediate neighborhood offer the most pertinent data for predicting the sale price of your home.  List prices of homes still on the market should be taken into consideration also, because they show the current pricing trend.  A professional real estate agent will do all this research for you as part of their services.

2.Condition of your home: If your home has been better maintained, is more up to date and shows better than the other Brooklyn homes for sale, it will sell faster and for more money. Updates, even those as minor as having current paint colors, impact pricing.  Updated kitchens and baths are especially important to buyers.

3. Appraisal value: As the seller, you can get an appraisal on your home before putting it on the market.  You’ll have to pay for it, but it may be worth it to get access to this pricing tool.

Ready to sell your home?  Let me do the research for you and help you set the best price to get your home sold.  Call Charles D’Alessandro of Fillmore Real Estate today at  (718) 253-9600 ext 206 or email me at  [email protected]

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog 3 Tips to Protect Yourself from National and Brooklyn Real Estate Fraud

The Federal Government envisions a secure and stable marketplace for national and Brooklyn homes for sale, thus their involvement. We may or may not like the politics, but the fact remains that the marketplace has stabilized somewhat, and prices are leveling in anticipation of an upward turn.

No matter the actual state of the market, the simple fact is that motivated buyers and sellers for Brooklyn homes for sale do still exist. If not, a lot less people would visit this site.

If you market your home correctly, the opportunity to sell is still promising. After all, interest rates are favorable, prices are realistic and the government has thrown some interesting incentives to buyers, sellers and lenders alike.

You and your real estate agent have the ability to induce buyers to act.  If your agent is experienced, he or she will work with you to develop incentives and add appeal to the transaction.

Step 1:  Provide Factual Information

Facts outweigh rumor, and having provable information helps get rid of the buyer’s reservations.  Here are some of the main facts you and your agent need to have at your fingertips in order to induce buyers to act:

• Knowledge of all local, state and federal tax incentives available to residents of your area
• Knowledge of all projected closing costs
• An understanding of the buyer’s financial and domestic qualifications
• Complete knowledge of the school system and all community services and costs
• Expertise concerning the history and composition of the home
• Knowledge of any planned growth in the area

Step 2:  Provide Incentives

The “incentivizing” (no, that’s not a real word) of your home involves several factors. Some incentives may be more creative than others.  Here are a few ideas:

• Offer a one-year home warranty program through a third party provider. This is a popular way to relieve buyers of some of their reservations. The idea is based on getting rid of unexpected expenses and the possibility of hidden costs.
• Have the seller pay part of the closing costs.
• Combine the above two incentives with a flexible closing date to make Brooklyn homes for sale that much more attractive.

Want help “incentivizing” your home to get it sold?  Give me a call today at (718)253-9600 ext.206 or email me at [email protected] to find out how I can help sell your home.

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog 6 Things to Consider When Looking at Condos in Brooklyn

It’s open season on homes for sale in Brooklyn, and no hunting license is needed. You might want to wear bright orange jackets if you’re a seller, though. It’s a buyer’s market and, in this case, you want the house hunters to see you.

Now, you can only take the hunting analogy so far; I don’t think you’d appreciate being hung on a wall as a trophy. You will appreciate hunters setting their sights on homes for sale in Booklyn, however. Here are a few tips to ensure that your home is the one they target:

Stand out in the open

To put it simply, buyers are using more and more technology nowadays. Obviously, you, as the seller, want to be where the buyers are, right? Embrace the Internet. Twitter, Facebook, blogging and other forms of social media are some of the ways successful sellers have managed to garner attention. So, start networking online, or hire an internet savvy real estate agent to do it for you.

Use an agent

This may sound self-serving; I am, after all, a real estate agent. However, while you may be trying to figure out whether you really want to pay commission fees, also consider this. Agents have access to many places that do it yourself sellers don’t, such as MSN Real Estate, Yahoo Real Estate, their MLS listings and Realtor.com. Buyers do have access, and they’re looking. As the seller, you want as much exposure as possible, and agents can get it for you.

Make affordable repairs

If you can afford to replace a worn out faucet, do so. If you can replace bad flooring, do it. Whether it’s plumbing issues or light switches, big or small, make the repairs you can afford to make. Then, and here’s the secret, advertise:  “All new fixtures!” or “Brand new flooring!” Sharing what you’ve done to make the house more attractive is like waving a red flag and, when you’re talking about house hunting, this is a good thing.

Add field dressing

Okay, perhaps that goes a little far with the hunting analogy. Basically, in a tough buyer’s market, presentation is everything. Have strong curb appeal outside. Get rid of personal clutter inside. Stage the rooms and clean, clean, clean. It’s a beauty contest.  Dress your home accordingly.

Putting these tips into action will greatly raise the chances of taking another home off the list of homes for sale in Brooklyn.

If you’re trying to sell your home and need an internet savvy agent, I can help. Call me at (718) 253-9600 ext.206 or email me at [email protected] for more information.

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog Reports Say, “Yes, You Can Buy a Brooklyn Home for Sale!”

— @ WiseStamp Signature. Get it now

You placed your Brooklyn home for sale on the market weeks ago, but it seems no one is interested. What you may not realize is that the most desirable, most treasured buyers arrive at your home every day. They may not knock; they may not schedule an appointment; they may even need Map Quest to figure out where you are, but they’re viewing your home.

Buying habits are changing rapidly. More than 70 percent of today’s buyers find the house they want to buy through online resources. Why aren’t they just getting into their cars and coming by for a visit? Because a large part of your potential buyers are looking at your Brooklyn home for sale from states away…

The Invaluable Relocation Buyer

You want the relocation buyer. In fact, every seller, every agent and every community wants the relocation buyer. Why? Relocation buyers are those who have to move. They’re incredibly motivated to buy, and the chance of them buying a home in the community is high.

Your Buyer’s Profile

Your relocation buyer is probably an educated professional in his or her field. Relocation buyers usually know exactly what they’re looking for, and aren’t willing to budge much. They’ve commonly moved before and are knowledgeable home buyers.

If you’ve never sold a home, they’ll most likely understand the buying/selling process better than you do. They also know that real estate activity and values are different in every area. As well, they know how their companies’ relocation assistance programs work, which affects their moving budgets.

Reaching buyers is a competitive process. If you want highly motivated buyers like these knocking on your door, you need a well-organized marketing strategy.

Talk to your real estate agent about your online presentation. Perhaps a video tour would be the best strategy to attract buyers to your Brooklyn home for sale. Whatever you decide to do, if your marketing strategy doesn’t include a well-put-together online presentation, you’ve already lost the relocation buyer.

Are you missing a large buying market for your home? I can help. Call me at (718)253-9600 ext.206 or email me at [email protected] for more information.

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog Home for Sale in Brooklyn? Why Disclosure Is Important