Contingency Removal Checklist for Homeowners
As you progress through the home selling process, it’s crucial to address and remove contingencies to ensure a smooth and successful transaction. This checklist will help you navigate each step with confidence.
1. Review the Offer Carefully
- Understand the Buyer’s Contingencies: Most offers come with contingencies. Common ones include loan approval, appraisal, inspection, and sale of the buyer’s current home.
- Timeline Awareness: Ensure you know the deadlines for each contingency. Missing a deadline can delay or derail the sale.
2. Financing Contingency
- Check Pre-Approval: Ensure the buyer has a solid pre-approval from a reputable lender, not just pre-qualification.
- Monitor Loan Progress: Stay in touch with the buyer’s agent or escrow officer to confirm the buyer’s loan is progressing on time.
- Document Requests: Provide any required documentation, such as HOA information or property disclosures, to facilitate the loan process.
- Removal Confirmation: Once the buyer’s loan is approved, obtain written confirmation that the financing contingency has been officially removed.
3. Appraisal Contingency
- Appraisal Order: Ensure the buyer orders the appraisal promptly, as this can take time depending on market conditions.
- Appraisal Results: Review the appraisal once it’s completed. If the appraised value matches or exceeds the offer price, the contingency is satisfied.
- Negotiations: If the appraisal comes in low, be prepared to negotiate with the buyer. You can agree to reduce the price, ask the buyer to cover the difference, or cancel the deal.
- Removal Confirmation: Once resolved, confirm the appraisal contingency is removed in writing.
4. Inspection Contingency
- Schedule the Inspection: Ensure the buyer schedules the home inspection within the agreed-upon timeframe.
- Review the Report: After the inspection, review the report and any buyer repair requests. Decide whether to agree, negotiate, or refuse repairs.
- Address Repairs: If you agree to repairs, complete them professionally and provide receipts for the work done.
- Removal Confirmation: Obtain written confirmation that the inspection contingency is removed after negotiations or repairs are completed.
5. Sale of Buyer’s Current Home (if applicable)
- Monitor Buyer’s Progress: If the buyer’s offer is contingent on selling their current home, monitor their progress. Are they actively marketing it? Are there any offers?
- Backup Offers: Consider accepting backup offers in case the buyer’s home sale falls through.
- Timeline Compliance: Ensure the buyer meets the contingency deadline. If they fail to sell their home, you have the option to move forward with another buyer.
- Removal Confirmation: Once the buyer’s home is sold, obtain confirmation that this contingency has been officially removed.
6. Final Walkthrough
- Buyer’s Walkthrough: The buyer will conduct a final walkthrough to ensure the property is in the agreed-upon condition.
- Address Concerns: If any issues arise during the walkthrough, address them promptly to avoid delays.
- Removal Confirmation: After a successful walkthrough, confirm the buyer is satisfied, and no additional contingencies remain.
7. Closing the Deal
- Review Closing Documents: Ensure all documents are in order and reflect the terms of the sale.
- Final Payment: Confirm that all financial aspects are settled, including any closing costs, prorated expenses, or adjustments.
- Remove All Contingencies in Writing: Before closing, ensure all contingencies are removed in writing through the appropriate legal channels.
By following this contingency removal checklist, you’ll be in a stronger position to close your home sale smoothly, efficiently, and on time. Stay proactive, communicate with your agent regularly, and address any issues immediately to avoid unnecessary delays.
