Protect yourself with contingencies
Buying your first home in the Montpelier/Barre area is a big decision. It's important that you prepare yourself with as much knowledge as possible, and it's important that you protect yourself from making a mistake. In other words, you want to make sure you're doing things right.
A contingency is language in a contract that gives someone "an out". With Vermont real estate contracts, the vast majority of contingencies are in place to protect buyers. If a contingency needs to be exercised and the contract broken, it is important to keep in mind all of the dates and time frames. Your Realtor will be able to keep up on these critical dates to help protect you when buying a house.
Most people who buy a house in Montpelier or Barre have a property inspection. This is a blanket term for permission to have one or several people give their opinion as to the soundness, safety, durability, level of construction, etc. of a property.
There is no "Building Inspector" license. Anyone can inspect a building, although there are a number of highly qualified property inspectors in the area. It can be a very good idea and provide great peace of mind to have someone who has experience in property inspection.
The point of a property inspection is to discover any hidden defects or unknown problems in a house. Inspections are thorough, and if anything comes up that makes you feel like this isn't the right house for you, you can rescind your contract (within a certain number of days--stay in touch with your Realtor) and your deposit may be returned.
Banks don't want to lend money on houses that aren't worth as much as they're lending. If the house you're buying doesn't appraise for at least the contract price, you can get out of the contract. You don't have to, but you can. You can also bring this information to the sellers' attention and ask about renegotiating.
Life gets in the way of the best of plans. Despite having a pre-approval letter, if your life situation changes and you become unable to qualify for a loan, you can get out of the contract. There are timeframes and deadlines for this, so make sure you and your Realtor stay in close communications.
Other contingencies are less common, but do appear:
For example: an offer might be contingent on getting a settlement, having a satisfactory water test or septic inspection, or having the property lines clearly explained by the seller.
The point of the contingencies is to put a buyer at ease and assurance that things are working out. Contingencies protect buyers and provide peace of mind.
- Ray Mikus