A contingency is a condition of the contract that must be met or time expired in order to keep the contract binding. Some of the more common contingencies include financing, appraisal, inspections, and the sale or closing of a buyer’s current home. For land sale, buyers may require soil percolation, soil compaction, or well testing.
Unless otherwise specified in the contract, buyers are responsible for paying for their appraisal and all testing. You should be flexible and accommodate for these appointments. You are not required to be present as in most cases either the buyer’s agent and/or I will be there.
If they contract has a financing contingency, the property will also need to be appraised. Even if you recently had your appraised, almost all lending institutions will require an appraisal ordered by their process. On commercial properties, a lender may also require additional testing prior to funding such as soil or environmental testing.
Most homebuyers these days will make their purchase contingent on a home inspection. This is usually done by a licensed inspector but not always. Sometimes buyers will have multiple inspections if want an opinion on something specific inspected such as the HVAC, termites, or a pool. Typically this contingency is set to be completed within the first week or two after the contract is accepted.
If the buyer is not satisfied with the inspection or appraisal, they may request a renegotiation of the contract. If this happens, you need to stay objective. If an inspector finds an issue, you are now legally required to disclose it to any future buyers. Even if we could argue an appraisal, which is very rare, it initially came back lower so the buyer could still walk.
Hopefully you will never find yourself in this sort of situation, but if you are I will be there to offer you sound and practical advice to help you progress towards closing.