What Contingencies Should You Include in Your San Diego Home Offer?

Sunny San Diego is known for its booming real estate market, with properties near beaches, vibrant downtowns, and suburban havens attracting multiple bidders. As a buyer, you’ll want to balance competitiveness with caution. One way to do that is by carefully selecting contingencies in your offer. Below are the essential ones San Diego buyers should keep in mind—and how to use them effectively.

1. Inspection Contingency

• Why It’s Essential: Lets you evaluate a home’s condition—think HVAC, plumbing, electrical, and termite checks—common issues in older San Diego properties.
• Local Twist: Coastal homes, like those in Pacific Beach or La Jolla, may require special inspections for salt air corrosion or water damage.
• Negotiation Leverage: If significant defects appear, you can request seller credits, repairs, or opt out without losing your deposit.

2. Appraisal Contingency

• Purpose: Ensures the home’s value (as judged by a lender-approved appraiser) meets or exceeds your offered price.
• San Diego Market: Homes in hot neighborhoods like North Park or Carmel Valley can go for above asking, potentially leading to appraisal gaps.
• Waiving or Shortening: Some buyers reduce the appraisal timeframe or remove it altogether, though this can mean extra cash out of pocket if the appraisal falls short.

3. Financing Contingency

• Overview: Protects you if you can’t obtain a loan, allowing you to walk away with your earnest money intact.
• Why It’s Important: Even well-qualified buyers can face unexpected loan issues. This contingency is especially helpful if you’re relying on VA or FHA financing, which can have additional lender requirements.
• Competitive Strategy: If you’re fully underwritten or have a large down payment, you might reduce this contingency period to signal confidence to the seller.

4. Termite/Pest Inspection Contingency

• Regional Consideration: Southern California’s climate can be hospitable to termites and other pests. Many buyers (or lenders) require a termite clearance.
• What It Covers: Typically includes checks for termites, wood-boring beetles, and fungal damage.
• Who Pays: Negotiable—sometimes sellers in San Diego cover the termite report and clearance, but in competitive situations, buyers might assume that cost to sweeten their offer.

5. Home Sale Contingency

• Definition: If you must sell your current home before finalizing the purchase, this clause protects you if your sale falls through.
• Risky in a Hot Market: San Diego sellers often see multiple offers, making a home sale contingency less appealing.
• Alternatives: Short-term rentals, bridge loans, or timing your transactions carefully can help you avoid this contingency altogether.

Conclusion
Choosing the right contingencies in your San Diego offer can shield you from major pitfalls—without pushing sellers away. Inspection, appraisal, financing, and termite contingencies each offer a safety net, but how you deploy or modify them can impact whether your bid is accepted in a competitive market.

Still unsure which contingencies fit your situation? Contact us for expert guidance on crafting an offer that balances protection and attractiveness for San Diego sellers.