Myth # 4 Contingencies are in The BUYER’s Best Interest
It is counter-intuitive to think contingencies in a real estate transaction are in the SELLER’s best interest. Which explains the look on people’s faces when I state what is obvious to me. (Contingencies allow the buyer to “walk away” from the transaction unharmed.) Contingencies are in the Seller’s best interest. Period. Since I’ve been making that statement for years, I’ve witness dozens of baffled expressions.
What Didn’t the Buyer(s) Know & Why Didn’t He/She/They Know It?
The truth is: lawsuits do happen around contingencies. One must consider: Were contingencies part of the transaction? If so, how many contingencies? Which contingencies were included or excluded? Why did the Buyer waive or the remove a particular contingency and with what information was he and/or she relying on? My favorite: If contingencies were waived up-front, who’s idea was that?
Only good solid real estate Standards of Care and counseling can avoid what buyers are later trained to say in depositions: "I relied on my agent” and “I didn’t understand what a contingency meant.”
Risk-Management for the Seller translates to Consumer-Protection for the Buyer.
Real estate attorneys agree: Buyers against Sellers represent 80%-90% of disputes. How can a Seller avoid being the target in a “Bad House Case?” There are simple but multiple layers of risk-management procedures that Sellers ignore (usually due to agent driven ignorance and/or stupidity). The Seller should consistently engage in “over-disclosure.”
He and/or she should grant contingency periods with reasonable timelines, and encourage the Buyer to have any and all inspections a Buyer deemed necessary. Prior to “going on the market” Savvy Sellers have the property fully inspected; make any or all corrective repairs using qualified/licensed vendors.
In other words: if the seller/agent(s) do their job well with full contingencies across the board, the SELLER will be rewarded with positive results and a satisfied Buyer.
Pat Kapowich, "Negotiating Smooth Transactions Throughout The South Bay" SiliconValleyBroker.com