West Real Estate | Wilmington Real Estate, Tewksbury Real Estate, Reading Real Estate


In a high competition market, you may be tempted to do whatever you can to entice the seller to accept your offer. Buyers write offer letters, provide large down payments, or waive the inspection. Sometimes, this strategy includes removing contingencies from your contract. 


Beware. Removing contingencies can easily become a nightmare for you as a buyer. Certain contingencies should be kept no matter how much you think you should waive them for enticement. 


The Home Inspection Contingency


This contingency is basically universally recommended by realtors everywhere. This contingency allows you to get a licensed home inspector who will check the property. The inspection typically should be done about 7 days from the time you sign the purchase agreement for the home. 


Following the inspection, you as the buyer can request that the seller make certain repairs. The seller can either make the repairs or provide a counter offer. If you’re not satisfied or cannot reach an agreement, you can back out of the deal and still get your money back. 


Without this contingency, you’ll never know what’s wrong with the home until you move in it. It’s a huge risk to take to move into a home without understanding all of its moving parts. Is the roof stable? Has the basement flooded? Will the appliances last? There are plenty of questions that you might have about a home that can be answered simply through an inspection. 


Financing Contingency


This is an important contingency. Your offer on the property will depend on being able to get the financing you need to purchase the home. With this protection in place, in the event that you can’t get a loan, you’ll get your deposit on the home back. Be sure that the clause specifies the number of days that would be recommended by your lender to have the mortgage approved.   


Appraisal Contingency


This could be the most important contingency of all. This protection could possibly save you thousands of dollars of a headache. Once an offer is accepted on a home, you’re far from done. The lender will typically order an appraisal. If the appraisal comes in lower than the offer you made on the home and agreed to pay, you may have some problems. 


The lender will only lend you what the house is worth. If the appraisal comes in lower, you’ll need to make up for tens of thousands of dollars out of pocket. Make sure you have an appraisal contingency included in your contracts!  


As you buy a home, remember how important contingencies can be in the process.            


Home appraisals are an important part of the buying and selling process. Lenders use appraisals to make sure that the home is worth what the borrower is paying. A home’s appraisal value is based on a number of factors, all of which we’ll discuss in this post.

Whether you’re a buyer, seller, or are just learning about the process of buying a home so you’ll be better equipped in the future, this article is for you.

How is a home appraisal different from an inspection?

While home appraisals and inspections are performed by licensed or certified professionals, they have to different functions. An inspection ensures the safety of a home, as well as whether or not it will need repairs in the immediate or near future.

Appraisals, on the other hand, aim to value a home based on its property value, the size of the property, and the location of the property. The condition of the home is a factor in valuing a home, which is why some people confused appraisals with inspections.

Who pays for appraisals?

Like most closing costs, a home appraisal is a burden that falls on the buyer. Typically, the lender you choose will work with will actually order the appraisal. The cost, which usually amounts to a few hundred dollars, can be added to your closing fees. You can find the cost for an appraisal listed on the Closing Disclosure document provided by your chosen lender.

Which factors determine the home’s value?

To appraise the house itself, appraisers will look at the condition of the home. They’ll also weigh the features of the home in their valuation--things like the number of bedrooms and bathrooms, for example.

However, the two key characteristics of a home that contribute to its value are its age and size.

Which external factors contribute to the home’s value?

As you might suspect, the location of your home matters greatly when it comes to appraisals. Homes are appraised based off of average prices for their neighborhood and region.

Other location factors include how accessible the home is, if it’s located on a waterfront, and whether it has desirable views.

When does a home get appraised?

While your experience may vary based on your specific circumstances, most appraisals occur after a buyer has signed a purchase contract. One this is done, the lender will take the steps necessary to order and process the appraisal.

How long is the home appraisal process?

Once the buyer has signed a purchase contract, the appraisal is usually completed and processed within 7 days. The appraisal report will be sent to the lender. This report contains the appraised value of the home. Buyers are entitled to a copy of this report, and should keep one for their own records.


There is a lot that goes into the buying and selling of a home Not only are there many steps to take but it can feel like there is a report for everything. It’s easy to forget what they are or why they are necessary.

Three processes that seem similar to home buyers are the home inspection, comparative market analysis, and the appraisal.

Here’s what each them is and how they are different:

First, let’s look at the home inspection.

The home inspection

What it is:

This is probably the one you are most familiar with and have heard the most about. During a home inspection, an inspector is paid to come and test all of the appliances, outlets, plumbing as well as the heating and cooling system.

What this information is for:  

This information is for you the buyer, It is to help make a well-informed decision as to whether the investment you are making is worth the current state of the home. Whether there be repairs that will have to be made or replacements that will need to happen down the line.

The custom market analysis or CMA

What it is:

A sales report your real estate compiles using data they have exclusive access to. This data is compiled into a database used solely by other real estate agents.

What this information is for:

A CMA is used by you and your agent to determine if an asking/selling price is fair. You’ll be able to compare the pricing to other listings and conclude whether it is higher, lower or on par with other offers. This is incredibly useful no matter which end of the spectrum you plan on selling or buying.

An appraisal

What it is: A licensed appraiser comes to visit the home and inspect it solely for value. This is determined by the location, state of and surroundings of the home. Your potential home will be compared to other similar properties in the area to come to a conclusive value.

What this information is for:

The final approval of your mortgage terms by your lender. If the determined value is much lower than your offering price you can be declined a mortgage.

As you can see, each of these processes has varying impact on the final purchase of your home. The information obtained from a home inspection is up to solely your discretion. That gathered from the CMA helps you to determine where the asking price of a home is sitting in comparison to others on the market. And in turn, whether you’ve got a really great deal on your hands or an inflated price. And lastly, perhaps the most important is the appraisal. The information gathered from this process is what your lender uses to determined whether or not to lend you the requested amount.




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