If you’ve been following the series you may already know that I have recently had many clients ask about what contingencies are in a real estate purchase agreements and how best to use them so they are protected and get a good deal. So I have put together a series of blogs to explain what they are and the best way to use them.

It is very uncommon to have a purchase agreement in Fremont without contingencies. In fact, contingencies are an essential part of many offers for homes in Fremont. In general, contingencies are added to protect you (the buyer) but may also serve to protect the seller.

All of the contingencies of a purchase agreement must be met before a Fremont home sale can be competed. In this first series I discussed some examples of contingencies and the most common ones in a Fremont purchase agreement. In part two, I discussed who writes contingencies, and who they protect. In the third I discussed how contingencies can be used as deal points. In this final blog I will be letting you know how to use a contingency to get yourself a better deal, and also how to avoid unnecessary contingencies.

You Can Use A Contingency to Get Yourself a Better Deal

The skillful negotiator will use contingencies to improve the deal. And there is really no limit to the type of contingency you can craft. Deal points can be over anything ranging from the date escrow closes to the specific closing costs the buyer and sellers must pay.

A great way to start negotiating is to find the sellers weak point and apply the pressure there. For example, the sellers may absolutely need to close the deal within 25 days so that they can purchase a new Fremont home. You agree as long as they add new carpet, lower the price, repair the sprinklers, and leave the ceiling fans. In this way, they have met their criteria by giving you the superior deal.

Remember, that although contingencies are great points for negotiations, they are there to protect you. They offer you an easy way to back out if something goes wrong.

Avoid Unnecessary Contingencies

Sometimes when Fremont home buyers discover the great protective value of contingencies, they insist that extra ones be placed in the purchase offer. For example, you insist that the purchase become contingent on you not losing your job before the deal closes. (You pretty much get this protection in any event, since if you lose your job, the lender probably won’t give you a mortgage, and you can back out using the financing contingency.)

Or you insist that the deal be contingent on your not getting ill during the escrow period, or your spouse not falling out of love with the home, or you getting approval of the purchase from your parents. Remember, you can make the deal contingent on anything!

The problem is that each time you add a contingency, you weaken the deal. The sellers ask themselves, “Why does the buyer insist on this?” If the quickest answer is that the buyer is wishy-washy and may not go through with the deal, the sellers may simply refuse to sign. You may squash a perfectly marketable deal simply by insisting on unnecessary contingencies.

As many Fremont real estate agents have witnessed, lawyers can ruin an otherwise marketable deal by adding contingencies favoring their clients to the point where the other party simply won’t go along. While legal advice is great, sometimes common sense and human nature play a stronger role.

Thank you for taking the time to read the information I have made available to you. This information is brought to you by your Fremont real estate expert Clyde Brown.  If you are considering buying or selling property, planning to relocate, looking for Fremont homes for sale, or looking for any other information about real estate in the Fremont real estate market, or the surrounding areas, please visit the most complete website dedicated to everything real estate related www.ClydeBrownHomes.com.

If you or someone you know are in need of a competent and experienced Bay Area Realtor, or have real estate or mortgage related questions, please feel free to contact me I will be more than glad to answer your questions. Call me at 800-839-0665 or email me at Clyde@ClydeBrownHomes.com. For all your East Bay cities needs including Fremont, Newark, Union City, Hayward, Oakland, Santa Clara, Milpitas, Dublin, Livermore, Pleasanton, and San Ramon. Clyde Brown Legacy Real Estate & Associates.

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Article's Author

Clyde Brown
Legacy Real Estate and Associates
Fremont, CA

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