What is the Financing Contingency in NYC Real Estate?
The Financing Contingency Explained: https://www.hauseit.com/financing-contingency-nyc/
Reduce Your Buyer Closing Costs in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
The financing contingency is often misunderstood. The financing contingency is actually a rather broad term for a contract contingency that can include many negotiable parts, such as an appraisal contingency or minimum loan amount contingency. It’s important to understand that while a financing contingency is often asked for during the offer negotiation stage, it is fleshed out in more detail during the contract review stage between the lawyers.
What Is the Financing Contingency?
The financing contingency is a contract contingency that allows a home buyer a certain amount of time post contract execution to secure a loan commitment letter. If the buyer makes a bona fide effort yet still fails to secure a financing commitment from a lender, the buyer is allowed to cancel the contract and walk away with their earnest money check.
Because the financing contingency is a contract contingency, it only takes effect after a listing is in contract. This means that the financing contingency offers protections to the buyer after a purchase contract has been fully executed. Essentially, a financing contingency provides the buyer with a way out of the contract in case he or she is not able to secure a financing commitment letter, typically within 30 to 45 days after contract execution.
Is a No Financing Contingency Offer Better?
A no financing contingency offer is certainly more attractive for sellers, but is less advantageous for buyers. Having no loan contingency means a greater certainty of close in the eyes of the seller, which equates a non-contingent offer utilizing financing to that of an all cash offer. Of course, all cash offers are still the best because they are faster to close due to not having to wait around for a bank to fund a loan.
However, no loan contingency isn’t so great for a buyer that actually needs a loan to be able to close. If the buyer doesn’t have backup funds to cover the entire purchase plus closing costs in case he or she doesn’t get funded, then he or she risks having to default on the contract and losing his or her contract deposit!
Buying a home? Learn more about how you can save $20,000 or more on your purchase with a Hauseit Buyer Closing Credit at www.hauseit.com
Save Money with a Hauseit Buyer Closing Credit: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
#hauseit #hauseitnyc
https://www.hauseit.com
Reduce Your Buyer Closing Costs in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
The financing contingency is often misunderstood. The financing contingency is actually a rather broad term for a contract contingency that can include many negotiable parts, such as an appraisal contingency or minimum loan amount contingency. It’s important to understand that while a financing contingency is often asked for during the offer negotiation stage, it is fleshed out in more detail during the contract review stage between the lawyers.
What Is the Financing Contingency?
The financing contingency is a contract contingency that allows a home buyer a certain amount of time post contract execution to secure a loan commitment letter. If the buyer makes a bona fide effort yet still fails to secure a financing commitment from a lender, the buyer is allowed to cancel the contract and walk away with their earnest money check.
Because the financing contingency is a contract contingency, it only takes effect after a listing is in contract. This means that the financing contingency offers protections to the buyer after a purchase contract has been fully executed. Essentially, a financing contingency provides the buyer with a way out of the contract in case he or she is not able to secure a financing commitment letter, typically within 30 to 45 days after contract execution.
Is a No Financing Contingency Offer Better?
A no financing contingency offer is certainly more attractive for sellers, but is less advantageous for buyers. Having no loan contingency means a greater certainty of close in the eyes of the seller, which equates a non-contingent offer utilizing financing to that of an all cash offer. Of course, all cash offers are still the best because they are faster to close due to not having to wait around for a bank to fund a loan.
However, no loan contingency isn’t so great for a buyer that actually needs a loan to be able to close. If the buyer doesn’t have backup funds to cover the entire purchase plus closing costs in case he or she doesn’t get funded, then he or she risks having to default on the contract and losing his or her contract deposit!
Buying a home? Learn more about how you can save $20,000 or more on your purchase with a Hauseit Buyer Closing Credit at www.hauseit.com
Save Money with a Hauseit Buyer Closing Credit: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
#hauseit #hauseitnyc
https://www.hauseit.com
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