What’s the Deal w/ a Financing Contingency?
What’s a Financing Contingency?
A financing contingency is a clause in the purchase and sale agreement (also known as the contract) that states that the contract is contingent upon the buyer’s ability to secure a loan from the bank to purchase the property. If, during the financing contingency period, the bank determines that the buyer does not qualify for the loan, the buyer can terminate the contract and keep his earnest money. Most financing contingencies also include an appraisal contingency, which states that the contract is contingent upon the property appraising for at least the sales price.
If the property does not appraise for the sales price, the buyer may attempt to negotiate for a reduced sales price, accept the property at the current sales price, or walk away from the deal with his earnest money. These contingencies have strict requirements regarding the steps that a buyer must take in order to protect his earnest money, so it is important to have a Realtor who has the experience and knowledge to help you through this process.
[su_note note_color=”#eeeeee”]If you or someone you know has a question about financing contingencies and how to best protect the earnest money, give the Midtown Condo Experts at CityMax Realty a call today! 404-926-6027[/su_note]