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What are standard home-buying contingencies in New York City? This is one of the most commonly asked questions by new home buyers which we'll aim to demystify in the following video. I'm Chris with Hauseit. In case you're not familiar with the platform, Hauseit is the largest For Sale by Owner and Buyer Closing Credit company helping home buyers and sellers save money on broker commissions in New York City since 2014.

Leave a comment below, hit subscribe. We do come out with regular content and now let's move on. The most common contingency that you'll find in New York City is the financing contingency. Now this is a rather blanket term as it encompasses many potential other contract contingencies such as a minimum loan amount contingency. However this is the most common one you will see precisely because many others that you'll see in other states are not necessary. For example a free and clear title contingency. Now you might see some other states such as California.

However it's not necessary in New York because most contracts will already have standard language saying that title should be delivered free and clear. Now another contingency you might think of is the inspection contingency. However this is not necessary in New York City because most inspections are done prior to contract signing but after an offer is accepted. What typically happens is a buyer will ask for a second or third showing after the offer is accepted and then bring a home inspector with him or her.

Now the home inspector keep in mind will only be able to do a visual inspection. Don't get confused about the home inspector potentially opening up walls and such and inspecting pipes. They will only be able to do what you can do with the visual inspection though perhaps they may have a bit more experience and perhaps one other thing they can do additionally is to secretly perhaps test for mold by pricking the walls.

Now this inspection is usually done after they accept that offer because if any issues are found by the home inspector that you wish to bring up with the seller you can always do so and perhaps asked to renegotiate for a repairs or a reduction in price. Now this is actually quite a common tactic by home buyers employed in the city, one of the primary reasons being the seller may already be quite emotionally invested with their offer. They will have additional days on the market and possibly stopped showing as frequently perhaps and as a result the seller may be more amenable to negotiating. What typically happens since most sellers are not home contractors or general contractors themselves is they will usually agree to some reduction in the contract price in lieu of repairs.

As a result because things are sorted out prior to contract signing an actual contingency clause in the contract for an inspection is not necessary in New York. This brings us back to the real contingency that you might see in New York City and that again is the financing contingency. When it is submitted in an offer format it is rather vague and a blanket term that undergoes further negotiation by the buyer and the sellers attorney. Now just to quickly allude to two of the potential variants or additions to a financing contingency. Let's start with the minimum loan amount contingency. Now the minimum loan amount contingency allows you to exit the contract even if you get a commitment letter but for an amount less than specified in the contract.

For example if the minimum loan amount specified and negotiated by your lawyer in the contract is $2 million but you only were able to get a commitment a letter and a loan for $1.8 million and made best efforts to do so. Well it lets you exit the contract or more potentially allows you to renegotiate with the seller. The other variant is the appraisal contingency as you expected most buyers will assume that the appraisal will come in at the contract price.

Of course this doesn't always happen in reality and if properly negotiated by your lawyer well if the appraisal comes in lower than the contract price or whatever the price set by the appraisal contingency is, it allows you to exit the contract or renegotiate as well.

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