As you browse listings on BerkshireHathawayHS.com or  realtor.com, you may view homes that appear to be unavailable, due to a contingency. If you find the perfect home, but it’s labeled Active Kick Out or Contingent, should you pursue it or forget it?   

The reality is that contracts fall through for many reasons. If you have a back-up contract, you’ll be first in line to buy the home should it come “Back on Market” or “BOM.”

Active kick out
Active kick out means the buyer has made the offer with a contingency, and the seller has accepted, but reserves the right to accept a better offer and “kick out” the previous buyer. Once the seller accepts the back-up contract, they must give the first buyer 48 to 72 hours to either remove the contingency and move forward with the purchase or back out of the contract.

Contingency
Nearly all offers-to-buy have contingencies. The home must meet the appraised value by the mortgage lender’s third-party appraiser, or it must pass a professional third-party home inspection. The buyer may make the contract contingent upon the lender funding the purchase.

To learn more, talk with your Berkshire Hathaway HomeServices network professional.

What should you expect when you buy a model or “spec home” from a builder?

A model home features upgrades to show the builder’s floorplans to advantage. If you can wait until the builder sells their inventory, you could get the model at the original price and with more upgrades than other homes in the neighborhood.

A “spec” home is move-in ready. The clock is ticking on the builder’s bank loans, materials and labor, so if you’re preapproved by a lender and have no contingencies to delay closing, you can move in quickly.

Many builders have their own contracts, so you should be represented by your Berkshire Hathaway HomeServices network professional. Builders won’t negotiate price because of other homes in the subdivision, but your agent may be able to negotiate a free fence or countertop upgrade. The agent can see you through inspections and make sure the builder performs as expected.

Shop for new homes with your real estate agent. Otherwise, inform the builder or their in-house salesperson that you’re represented and offer your Berkshire Hathaway HomeServices network agent’s contact information. Builders won’t pay the agent’s commission if you bring them in after you’ve already toured the model or spec home.