Our last blog took you through the journey of finding your next home and getting under contract. Now that the house is under contract, the next step is to satisfy all contingencies of the contract and get to closing. In real estate, closing is defined as the moment when all funds are disbursed by the closing attorney. At that point, you are handed a set of keys and the home is yours! Getting to this point does involve dealing with the different contingencies built into the contract to protect you. The primary ones as follows: Financing, Due Diligence Period, and Appraisal. There can be others written in by your agent depending of what your circumstances are. Let’s first address these main three and then look at some of the extras.


This contingency essentially states that if you, the buyer, are unable to obtain financing, you are released from the contract and are not in default and do not lose your earnest money. However, you are held accountable by two important time constraints. You must apply for your financing within 5 business days of contract acceptance. This is another reason that getting pre-approval from a lender and knowing which lender you want to use is so important. As soon as the contract is accepted, you should be getting in touch with the lender about applying for your financing. If you fail to apply within these 5 days, you are considered in default of the contract and could lose your earnest money. The second constraint is that the financing contingency expires 5 business days prior to the closing date. This means that if your financing falls through in those last 5 days, your are considered the defaulting party. This may seem like a very late point in a contract to have financing fall through; however, there have been times that mistakes were made. This may happen if you make what is considered a “material change” to your financials. An example of this would be buying a new car using a loan or opening a new credit card prior to closing. These are all things that your agent, as well as your lender, should caution you against. Click here to see a further list of actions to avoid while under contract. This contingency, as well as the others, are considered optional. When completing the contract, you have the option of checking either the “is” or “is not” box.

Due Diligence Period

This contingency is related to the condition of the home. In the first 10 business days you have the opportunity to have any and all inspections on the house that you desire. Your Carolina Girls Buyer’s Specialist schedules these for you and attends them with you, or in your place if you are not able to. The three inspections that we always recommend are the HVAC, Termite, and General Home Inspections. These three will give you an overall idea of what work may need to be done at the house and whether you need to have  additional inspections. We try to schedule these near the start of the 10 days so that if something major comes up, we have time to get repair estimates and you have time to think over what you would like to do.

If you would like to ask the sellers to fix any issues with the home, your agent will prepare a repair addendum that is submitted to the sellers within your 10 day period. The sellers then have a 5 business day period to respond. The addendum may go back and forth several times during negotiations before both sides reach an agreement or choose to terminate the contract. As with the other contingencies, this one is optional. You may choose to buy the home “As-is” with or without a due diligence period. We always recommend doing inspections regardless of whether you are purchasing “As-is”. Even a home that looks perfect can have some hidden defects that a trained inspector will find. We also encourage buyers to keep copies of these inspections and use them as “To Do” lists for their home after purchase. Some inspectors will point out minor defects that will need to be addressed eventually before they become worse. Having this record helps you keep track of home maintenance and protect your investment down the line.


An appraisal is a professional’s opinion of the value of the home. If a loan is being applied for, the bank hires an appraiser to go out to the property and do an in depth analysis of the home value based on current market conditions. The bank will only give you a mortgage amount that meets the appraised value. If the appraisal comes back at the value of the agreed upon price or higher, then this contingency satisfied. However, if the appraisal comes back lower than the sales price, you are protected by this contingency and can choose to leave the contract or allows 3 business days for you to negotiate with the sellers. This contingency protects both parties from having to bring extra money to the closing table if the appraisal is not high enough. It also protects you from purchasing a home that could not support the value you were expecting.

Other Contingencies

The other contingencies written into the contract would be used if you have a home that needs to be sold before you purchase the next one. The first is called a “Sale and Closing Contingency”. This is used if you have a home that has not sold yet and needs to close before you can purchase the next house. The second is simply the “Closing Contingency” which is used when your current home is under contract but needs it to close before you can purchase the next home. There are other contingencies that you can ask your agent to write into the contract should you have special circumstances; however, these are the most commonly used.

Contingency Myth

Often times we have buyers that are in need of items such as the washer, dryer, and/or refrigerator to stay with the home. When writing contracts I have many times been asked to write them in as contingencies of the sale. These items are considered personal property. Therefore, we include them on a separate Bill of Sale with the contract rather than including them on the Contract of Sale. We also encourage that you do not make the sale of a house contingent on the inclusion of a refrigerator as appliances are much easier to replace than the perfect house.


After all inspections are done, addendums are agreed upon, and the appraisal comes back good for value, the last step is getting the “clear to close” from the lender on the property. At closing you will have the pleasure of signing several stacks of papers which your closing attorney will take your through to make sure you understand exactly what you are purchasing. Your Buyer’s Specialist will also be at closing to make sure that nothing unusual transpires. Once you have signed everything and the seller has as well, the attorney will disburse the funds and you are the proud new owner of the home.

While you may think your relationship with our team ends at that point, you will be delighted to hear that we will still be in touch! Whether you have questions after closing about a home warranty or need a vendor to do work for your home, we are only one phone call or e-mail away!


The Carolina Girls