Everyone knows buying a house right now is challenging. Across the nation is a competitive real estate market brought on by an exceptionally low supply on a national level. As a result, in most markets throughout the country, homes are going over the asking price based on other competitive offers bidding up the homes. That phenomenon has been happening for the last few months and is continuing to happen presently. If you’re looking to purchase a house and you’re using mortgage loan financing to do it here are two proven ways that will work eventually…

On a real estate purchase contract, you have things that you must do in terms of performing your due diligence you have an inspection contingency in most cases, an appraisal contingency in most cases, and a loan contingency in most cases as well. Here’s what each one means and how manipulating these may help you and your agent be successful going into contract on a home. An inspection contingency is generally to make sure that the house that you’re buying is good it allows you to do walkthroughs, inspections a home inspection report and a pest inspection report, walk the neighborhood, and get a feel for the house to make sure you like the house and that you’re comfortable with the purchase. This can be anywhere from days to weeks after you get into a contract in most cases. If you decide you don’t want to purchase the house, or the house doesn’t pass the inspections generally speaking you can get out of the purchase contract and get your earnest money back. You’ll want of course to consult with a licensed real estate agent specifically.

Loan contingency is when the loan has been approved, and you know you can get the loan. In some cases, just like the other contingencies, you can sometimes ask for an extension if that does not happen period but when you release the loan contingency that’s when you commit yourself to buy the house and you take your poker chips off the table and your earnest money generally speaking is nonrefundable. The appraisal contingency is to make sure that the house is going to appraise let’s say you’re in contract on the house for $600,000. The house does not appraise for that, it appraises for $590,000 which would mean you would have to bring in the $10,000 difference in cash. There is a lens on the purchase price from the appraisal value; whichever is lower. Again, you can write it into the contract that perhaps at the house doesn’t appraise for a certain amount you can cover the difference. Again, you’ll want to speak to a qualified real estate agent.

Here’s where the rubber meets the road. In Sonoma County, California the market is sizzling hot. One such strategy you might want to consider is Considering the possibility of writing the offer with no loan contingency and no appraisal contingency. This is something for you to decide as the informed buyer with the advice of your real estate agent and lender. Meaning you’re fully committed to buying the house once you go into contract and there are no outs. Only you can make this determination. If you’re going to go down this path it is critically imperative to make sure with the lender that your loan is completely approved, it’s guaranteed, and that the loan is specifically going to work. Doing such a contingency release makes you extraordinarily strong. It’s almost as good as cash right upfront because essentially what you’re telling the seller is I guarantee I will perform on this contract. Again, always consult with a licensed real estate agent who can probably navigate the ends and outs with you of what this means and how it will impact your ability to buy the home as well as your bottom line.

If you’re looking to get pre-qualified and want to better understand more about what your options are for purchasing a home and being successful start with a no-cost loan quote today!