In a high competition market, you may be tempted to do whatever you can to entice the seller to accept your offer. Buyers write offer letters, provide large down payments, or waive the inspection. Sometimes, this strategy includes removing contingencies from your contract.
Beware. Removing contingencies can easily become a nightmare for you as a buyer. Certain contingencies should be kept no matter how much you think you should waive them for enticement.
This contingency is basically universally recommended by realtors everywhere. This contingency allows you to get a licensed home inspector who will check the property. The inspection typically should be done about 7 days from the time you sign the purchase agreement for the home.
Following the inspection, you as the buyer can request that the seller make certain repairs. The seller can either make the repairs or provide a counter offer. If you’re not satisfied or cannot reach an agreement, you can back out of the deal and still get your money back.
Without this contingency, you’ll never know what’s wrong with the home until you move in it. It’s a huge risk to take to move into a home without understanding all of its moving parts. Is the roof stable? Has the basement flooded? Will the appliances last? There are plenty of questions that you might have about a home that can be answered simply through an inspection.
This is an important contingency. Your offer on the property will depend on being able to get the financing you need to purchase the home. With this protection in place, in the event that you can’t get a loan, you’ll get your deposit on the home back. Be sure that the clause specifies the number of days that would be recommended by your lender to have the mortgage approved.
This could be the most important contingency of all. This protection could possibly save you thousands of dollars of a headache. Once an offer is accepted on a home, you’re far from done. The lender will typically order an appraisal. If the appraisal comes in lower than the offer you made on the home and agreed to pay, you may have some problems.
The lender will only lend you what the house is worth. If the appraisal comes in lower, you’ll need to make up for tens of thousands of dollars out of pocket. Make sure you have an appraisal contingency included in your contracts!
As you buy a home, remember how important contingencies can be in the process.
A multifamily home is defined as a building that has more than one unit. Each unit has its own separate kitchen, bathrooms, and utilities. These types of homes can be rented, owned, or be an investment property where a landlord collects rent.
A multi-family home is a more economical way of living. Because there is less privacy and tenants or owners are living in proximity to others, the cost is usually less. If you live in a multifamily home, you may not be responsible for things like exterior maintenance or landscaping and lawn care. The landlord may hire an outside company to take care of these tasks.
Multifamily Home Designs
Multifamily homes come in a variety of designs. You may pass by houses that more than one family lives in and don’t even realize. Types of multifamily dwellings include:
Duplex
Condominiums
Apartments
Townhouses
These designs could have anywhere from two families to hundreds of families living in them. Duplexes, condos, and townhomes tend to have owners rather than renters. Apartments are usually seen as a property type that is leased. Some properties are stand alone while others are part of a complex. Your choice of where to dwell or invest in a multifamily unit all depends on preference.
How Costly Are Multifamily Properties?
For those who don’t like to deal with yard work or maintenance, living in a multifamily unit could be a great choice. You may have to pay monthly HOA fees or other maintenance costs, but everything is taken care of for you. These fees may even cover maintenance inside of your unit.
If you are investing in a multifamily unit, the costs can get a bit more tricky. While you will know the cost of the mortgage and insurance, the monthly expenses to maintain the property are always unpredictable. These costs all depend on what in the property is under warranty and how old the property is. Older homes will need things like new furnaces and roof replacements. It can be tricky to know exactly how much to charge for rent to actually make a profit as a landlord.
Keep in mind that if people are renting from you, you’ll need to replace things like appliances, carpets, and flooring each time a tenant moves out, and a new one moves in. It can also be challenging to deal with tenant problems on a day-to-day basis. Be sure you know what you are getting yourself into if you decide to invest in a multifamily home.
Overall, multifamily homes can be a great housing option for many families because of the simplicity and cost-effectiveness.
