For buyers who need mortgages, sellers are loosening up
We’ve already heard that more new condos are set to go on sale this year, making things a little easier for buyers—the more apartments available, the less crazy the process of acquiring one, after all. But if you’re not in the market for a new development, there’s some good news out there for you, too. Apparently, more apartment sellers are making peace with mortgage contingencies, after months of demanding all-cash or non-contingent offers, the Real Deal reports.
A mortgage contingency in the contract lets you back out of a deal if you can’t get financing during a set period (and take your deposit with you). When sellers are in a position to field several offers, as many of them have been over the last year, they can pick a bidder who not only comes in with the highest price but also the surest deal. Hence, all-cash holds sway and contingencies are out. That bidding-war scenario is surely still happening, but not as often as the past few seasons, meaning sellers are bringing their demands back down to earth. “It’s not this big rush,” broker Mary Lou Currier of Bond New York tells TRD. “It’s not like 10 people are putting in offers and almost all of them are cash and not contingent.” That's good news for any buyer who needs to get a mortgage.
Meanwhile, some sellers are apparently introducing other provisions to protect themselves, like a clause that would require you to go ahead with the purchase even if the appraisal comes in lower than expected, as long as it’s within a range of the sale price. Another option is to go with a “hybrid contingency,” where you give the seller a “consolation prize” of something like $10,000—a significant chunk of change, to be sure, but likely a lot less than your deposit.
Related:
6 NYC building types where it's hard to get a mortgage (and how to get one anyway)
