Finding agreement with strangers can be beyond difficult at times, which is why I absolutely love exploring things that bring people together. One of these rare things that has the power to bring people together, especially in the hot summer months, is . . . smooth, soft-serve vanilla ice cream! Sure, some readers may say, “I can’t have dairy” or “We only eat gelato,” but let’s pretend that the world is a bit simpler and everyone loves soft-serve vanilla ice cream.
On a recent trip to my favorite ice cream shop, Dairy Queen, I was once again blown away by the abundant options that are available to add into the best vanilla ice cream in town (no, Dairy Queen isn’t paying me for this article!). One can choose multiple candies and put them into a Blizzard, blend a slushy and ice cream to make a Misty Freeze, or simply request that the ice cream be served in a cone or dish with one or a hundred different combinations of toppings. The thing about the “toppings,” or those things added to the ice cream, is this: they should make everything sweeter, more enjoyable, and super-tasty! And the feeling of making the ice cream “complete” is beyond rewarding!
Now, for those of us who have a hard time making decisions, Dairy Queen also provides “suggested flavors” or “the perfect combinations.” (Think their Apple Pie Blizzard in the fall or their Banana Split literally anytime!). These are wins for 99.9% of customers! Then there are those who choose their own toppings and combinations and think it is going to be delicious but realize their mistake as soon as the first spoonful melts into their watering mouths. Like Gummy Worms and Snickers may sound like an excellent combination, but it is not (speaking from experience!). But it is too late. The order is done.
When working with prospective purchasers of real estate, I try to remind them: we have the ice cream (standard real estate contract)—now let’s ensure it has the best combination of toppings (contingencies and clauses) out there! A real estate agent and/or brokerage firm should be providing both the ice cream and toppings (like a grocery store), but beyond that (and the way to tell a good brokerage firm apart from the rest) they should also present the already cleared and delicious combinations for you to try (like a Dairy Queen)!
So, what is a contingency in a real estate offer anyway? A “contingent in any sense means ‘depending on certain circumstances.’ In real estate, when a house is listed as ‘contingent,’ it means that an offer has been made and accepted, but before the deal is complete, some additional criteria must be met.” * One of the more standard contingencies you’ve heard of is the home inspection, where the purchaser has the right to review and evaluate the home prior to purchasing. Another example is the finance contingency, where the bank has to allow a mortgage before the sale moves forward. These are two of the most common contingencies, but hundreds of additional contingencies and contract clauses exist that can be added to the contract. But just as there are too many toppings for a Dairy Queen associate to tell a customer prior to ordering, there are too many contingencies in real estate to explain everything out there prior to making an offer.
Since contingencies are specific to each transaction and each individual’s needs, we suggest purchasers ask the following questions while finalizing an offer with their real estate agent:
1. In similar transactions, what contingencies were offered and which were accepted?
2. Can I loop in my loan officer or mortgage broker to ensure there are no additional contingencies or clauses that they require for the sale? (If they say no, find another real estate agent!)
3. Do we need to write or find any specific contingency directly related to my offer? (For example, do you need your mother-in-law’s house to sell before moving forward with your sale? This happens!)
4. Thinking ahead, what options are there if they don’t accept our offered contingencies/clauses as part of the purchase contract?
After receiving the answers above, ask yourself:
1. What contingencies could be waived, and would I still be comfortable moving forward with the sale?
2. Is my real estate agent looking out for my best interests in regard to the offer, or does it seem like they just want to make the sale to earn commission? (If the latter is the case, find another real estate agent!)
When planning on making any offer on real estate, make sure you have an outstanding real estate agent and brokerage firm explain your complete contract, including your selected contingencies. Let that experienced real estate agent offer suggestions on which ones to add, and if you trust their professional opinion, take their suggestions! The last thing you want is to find out later on that your ice cream is too plain or the combination doesn’t taste as sweet as it could or should! This is likely to be one of the largest financial contracts you’ll ever make! Make sure it is tasty!
About the Author: Ryan Fiero is the Principal Real Estate Broker and CEO of Urban District Realty, LLC, operating in Washington, DC and the Commonwealth of Virginia. His successful real estate background includes sales, property management, and development. Ryan currently lives in the Truxton Circle neighborhood of Washington, DC with his husband and exceptionally large Newfoundland pup.