Home Inspection or Not - Contingency Clause

emb_bosSeptember 21, 2010

We have put an offer on the house that we like with contingent upon us selling our current house. There is also "right of first refusal" contingency in the offer letter. We have 10 days to do home inspection, then can sign the P&S.

Now we are not sure if we should go ahead and spend $400 on the home inspection, if we only have 50-50 chance of getting this house. What worries us is our current house won�t get sold, or if the seller received another offer, then we only have 72 hrs to get mortgage on the house without us selling our current house. We definitely won�t be able to get the mortgage unless we sell our current house.

Now what should we do? Should we go ahead with the home inspection and hope for the best? Or should we take the risk and not do the home inspection?

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mariend

Personally, I would not spend the money and get the inspection if you have not sold your house.

    Bookmark   September 21, 2010 at 2:44PM
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qdwag

Not sure why anyone would take your "offer" anyway,you are in a tough spot as a purchaser..1st, you need to sell your current home to afford the home you have offered to buy,2nd)if another offer comes in,you're kinda out of luck(see 1st reason)..3rd) even if you spent the 400 bucks on an inspection,there is no gurantee you'll ever get this home(see 1 and 2 above)

My suggestion is withdraw your offer, and concentrate on selling your home,becuase without selling, you ain't buying..

    Bookmark   September 21, 2010 at 3:29PM
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pamghatten

I was thinking the same thing as qdwag .. not sure why you are purchasing now if you don't have a buyer with a mortgage commitment already in their hands.

    Bookmark   September 22, 2010 at 12:57PM
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berniek

What does your agent say?
My suggestion is to amend the offer to say that you will perform an inspection upon an acceptable offer on your property at ........street within 5 days after acceptance.

    Bookmark   September 22, 2010 at 2:25PM
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orv1

We had an offer to buy contingent on our house selling. We actually sold our house about 6 months after closing on the new one. Fortunately we were able to go ahead and get the house we wanted without selling. Unfortunately we sold our house for much less than we would have taken if we had not of already committed ourselves.

The seller probably wouldn't have taken your offer unless they didn't have any other options. Something for you to consider on the sale of your house. I wouldn't withdraw it but wouldn't commit myself to any time tables or expenditures.

If I had it to do over again I'd sell first then start looking.

Good luck.

    Bookmark   September 23, 2010 at 11:44AM
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live_wire_oak

If you can't afford to carry two mortgages and the possibility of losing $400 on an inspection is worrying you, then you aren't really in a position to buy another home at this time. Yes, there are "bargains" out there. But they are only bargains if you can afford their total costs. You can't without selling. So, concentrate on selling if you want to buy and let this one pass by.

    Bookmark   September 23, 2010 at 1:23PM
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emb_bos

We decided not to do home inspection and just go with the flow. We are willing to loose this new house if someone else made another offer. We're concentrating on selling our house now. However I do like berniek suggestion. I might bring that back to my agent.
The seller is happy with getting our offer and actually willing to stay and wait for 3 months.

    Bookmark   September 23, 2010 at 2:36PM
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qdwag

I think your quote:

The seller is happy with getting our offer and actually willing to stay and wait for 3 months.

Speaks volumes about your "local" market...How long do you think it'll take YOU to sell?

--------------------------------------------------------------------------------

    Bookmark   September 23, 2010 at 2:39PM
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emb_bos

Well..the house we put an offer on was on the market for 26 days. On average houses sold in my area 30 - 45 days. Hope for the best. Thank you.

    Bookmark   September 23, 2010 at 4:50PM
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orv1

You must live in the best market in the US.

    Bookmark   September 23, 2010 at 11:13PM
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qdwag

If the market is THAT strong,i wonder why the seller would take a contingency offer from you??? There would seem to be no reason in a market where homes sell that quickly

    Bookmark   September 24, 2010 at 6:57AM
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brickeyee

"There is also "right of first refusal" contingency in the offer letter."

First refusal for who to do what?

An offer letter is also not a contract.

When the offer is signed by all parties, it actually becomes a contract, and not until that moment.

Do you mean a 'kick out' clause?

Those are common when the purchase is contingent on a buyer selling their present home.

If the seller finds another bona fide buyer, the actual contract calls out the first buyer has some period of time (often a short time like 48 hours) to remove (or waive) the home sale contingency or the contract is canceled.

    Bookmark   September 24, 2010 at 11:16AM
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emb_bos

We're in the Boston surrounding..not too far from the city.

The seller is an older couple, who wants to downsize. I have the feeling they're happy with the 3 months, it gives them time to get ready to move and pack.

brickeyee - yes it is the kick out clause and all parties signed the offer agreement. We have 72 hrs to response if another offer comes in.

    Bookmark   September 24, 2010 at 3:31PM
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orv1

A quick Google search gives average days on Market for Worcester County MA as 120-127 for the month of July 2010

I'd make sure your REA isn't pulling your leg.

    Bookmark   September 24, 2010 at 4:44PM
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