Do Contingencies Create Risk?

Risk & Contingencies

Erik:

... Risk is inherent in the real estate process, Home ownership buying and stuff. There's some risk.

Randal:

And that's what your contingencies are meant to be, to help mitigate that risk, right? But we constantly get asked questions about dropping mortgage contingencies, dropping inspection contingencies, and today, really what I wanted to address was the risk of dropping your mortgage contingency. Of course, it becomes what everybody does in the spring season, but when seasons change, people all of a sudden have these questions and don't want to take on that risk of dropping that contingency.

Erik:

Buyers have a little bit more say and can put those protections back into a lot of their offers.

Randal:

Out of over a thousand transactions we've managed in our career in real estate, two, two, two of those resulted in a closing that didn't happen. One time because a buyer changed. The type of job that they were working at went from a W2 to a 1099. The other one was simply somebody that didn't show up for a closing. Two transactions over 20 years, over a thousand transactions didn't close because of that. Why do all of these close? Because we work with professionals in the industry, right?

Erik:

And by working with good professionals, you're doing risk reduction and you know what those risks are can help you navigate through those and eliminate it.

Randal:

And not just us and our team of agents, but the mortgage brokers that you're working with-

Erik:

And attorneys.

Randal:

So that is your risk mitigation when it comes to the contingency of mortgage contingency.