What is a contingency when buying a home in San Francisco?

If you’ve been looking for real estate in San Francisco, you have probably heard the term “contingency”; it means “dependence on the fulfillment of a condition”. In the world of SF real estate, a contingency is simply a period of time in which the buyer can investigate a property or mortgage loan while still protecting their deposit.

Contingencies are sometimes used for property inspections like a termite inspection. Other contingencies are for mortgage loan approval, appraisal, or the sale of another property. Sellers can have have contingencies too, like finding a replacement property, but buyer contingencies are more common.

 

parachute

In this very frenzied seller’s market, any buyer contingency can give the seller some pause when they are considering whether to accept an offer.

It can be challenging for buyers to protect their interests while still getting their offer accepted. As I’ve written about before, disclosures are important. Seller disclosure packages (complete with inspection reports) allow the buyer to be reasonably informed about the property at the outset before submitting an offer.

Regardless of disclosures, some buyers opt to roll the dice and waive all contingencies as a strategy to make their offer more attractive to the seller. Buyers should be aware that waiving contingencies is risky. As usual, it boils down to risk tolerance and of course every buyer (and every property) is unique.  If you are considering buying or selling, let’s talk about how contingencies might impact you.

San Francisco Real Estate Transfer Tax

Sellers have many things to consider when they prepare to sell their home or condo. One of the expenses that can surprise some sellers is the City & County of San Francisco Transfer Tax. This hefty tax is based on the sales price and is deducted from your proceeds by the escrow company. In transactions involving new construction properties, buyers are generally required to pay this tax. Here is how the tax is calculated.

How much can you expect to pay in transfer tax?*

Enter the sale price below:

 

 

 


Enter sale price: $

*This calculator is for general informational purposes only. Don’t make financial decisions based on the results of the calculator. Verify with SF Assessor’s office.