When you’re selling a home, getting an offer is exciting! This could be the buyer who purchases the property and helps you move on to your next chapter!
But, wait…what is this home sale contingency written into the offer? Could it be a deal-breaker?
Here’s what you need to know about home sale contingencies, including how they affect your transaction, and whether you should accept an offer with a home sale contingency.
What is a Home Sale Contingency
A home sale contingency is a stipulation that says your buyers have to sell their house before they can buy your house. If they don’t sell their house, they can’t buy your house.
Home sale contingencies are common in slower markets when finding a buyer can take longer than normal. But home sale contingencies can come up in any market, depending on the buyer’s circumstances. If the buyer needs to use the proceeds from the sale of their current home to buy your house, they might include this contingency. It gives them the option to cancel their purchase offer if they can’t get the funds they need from selling their house to close the deal on your house.
Should I Accept an Offer With a Home Sale Contingency?
Whether you should accept an offer with a home sale contingency depends on current, local market conditions, as well as your flexibility.
When to Accept an Offer with a Home Sale Contingency
You may want to accept an offer with a home sale contingency if:
- The buyer already has a likely buyer lined up for their house (especially if they are already under contract).
- Market conditions are so slow that it could potentially be months before you get another offer.
- You’re willing to accept the risk that your buyer might have to back out of the deal because they cannot find a buyer for their house.
- You can continue to market your property for sale and consider other competing offers.
When to Reject an Offer with a Home Sale Contingency
You might want to reject an offer with a home sale contingency if:
- Market conditions indicate that you’re likely to get another offer in the near future.
- Your prospective buyer has not even listed their house for sale yet, let alone found a buyer.
- You are not willing to deal with the added uncertainty of whether or not your sale can be completed.
When to Counteroffer
Accepting and rejecting an offer are not your only options; you can also counteroffer. Counteroffering is when you propose changes to the terms of the original offer. For example, you might agree to accept the offer with the home sale contingency, but only if:
- The buyer agrees that competing offers will be considered in the interim,
- The buyer can get their house under contract within the next two weeks (or whatever period you find acceptable),
- Or the buyer agrees to a higher purchase price to offset the added risk you are taking by accepting their offer with the contingency.
Leverage Your Listing Agent’s Expertise
Make sure you choose a listing agent who has their finger on the pulse of the market. Your agent should be able to advise you on when to accept, reject, or counteroffer, depending on your individual situation and current market conditions.
Do you have questions about listing your home for sale? Contact the experts at Sequoia Real Estate today! We’ll connect you with a well-qualified real estate agent to answer all of your questions and provide reliable guidance in your real estate transaction.