Home buyers are waving their contingencies

To win a bidding war, more buyers are waiving appraisal and inspection contingencies, according to the latest REALTORS® Confidence Index survey.

Here is the full list of contingencies buyers are removing:

Appraisal contingency (28%)

Inspection contingency (25%)

No contingency was waived (22%)

Financial contingency (11%)

Home sale contingency (9%)

Title contingency (2%)

Other (2%)

Would you waive your contingencies when submitting an offer on a home?

Source: Survey of more than 3,300 REALTORS®.

Why you should make sure you are all in on a property

As soon as escrow opens up on a property, the buyer has to wire over their deposit money.

The deposit is typically 3% of the purchase price of the home.

This 3% is held by the escrow company.

They hold on to the money just in case the buyer breaches the contract and the buyer and seller go to an arbitrator to decide who the money should be awarded to.

If the buyer backs out of the deal because of one of their contingencies (inspection, appraisal, loan), and they are within their contingency period, then the buyer gets their deposit back without any problems.

But if the buyer backs out of the deal, and all the contingencies have already been removed, that's when the seller can come after the buyer's deposit for damages they incurred.

An arbitrator will hear both sides of the story and ultimately decide who gets to keep the deposit money.

Changing your mind is not a home buying contingency

When buying a home, your offer will have a few contingencies written in the purchase agreement.

Here is 1 example of a contingency:

The purchase of the home is contingent upon the home passing your inspections.

If the home doesn't pass your inspections within your inspection contingency period, you can back out of the deal and get your 3% deposit back.

However, once you have removed all of your contingencies, you can't back out of the deal just because you wake up one day and decide you no longer want to buy the home.

If you do that, the buyers could come after your 3% deposit as damages.

Always remember, changing your mind about the purchase of a property is not a contingency.