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Why You Need a Financing Contingency in Your Ocean City Contract

What is a financing contingency, and why do you need it in your Ocean City real estate contract?

Ryan Haley, owner and broker at Atlantic Shores Sotheby’s International Realty, addresses this important question that every buyer should be asking. 

A financing contingency comes in the event that you are denied a mortgage. 

The rule is that as long as we include this contingency in the contract, and you have not misrepresented yourself and have fully applied and worked towards obtaining the mortgage, if ultimately, you are denied a mortgage, the financing contingency will protect you. 

The contract can be cancelled, and the deposit shall be dispersed according to the deposit paragraph in the contract. 

In essence, this contingency is another layer of protection for you as a buyer. Most of the time, there is no issue, but it is there to protect you, especially in a resort market where it is a little tricky and a bit more niche-oriented when it comes to financing. 

In a resort market such as Ocean City, the lender needs to look at and also consider the condo association and the homeowners association fees. This will be beyond your control. The best way to control it and minimize the risks is by using a good local lender who understands the ins and outs of condo financing. These local lenders are experts when it comes to the local condos, their budgets, rules, and restrictions. Working with a local lender will improve the chances of getting that condo building or homeowners building association approved. 

If you have any questions regarding buying or selling in the Maryland or Delaware real estate markets, please give us a call, and we’ll be happy to answer them for you.  

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