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  • Writer's pictureShawn Patrick Moloney

Home Sale Contingencies

Home Sale Contingency

When working with a buyer or seller alike it is crucial to understand what a home sale contingency is and what it could mean to the deal. There are many factors for each side of the transaction to think about. Sometimes we learn that the buyer has no choice but to use this clause and other times we can buy without needing to sell. Having these conversations early in the process with your clients can avoid pitfalls and stress later on.

For buyers it is important to talk with them and their lender to understand the financials behind their next home purchase. If they need the funds from their existing home to purchase their next home then they MUST use a home sale contingency. If the buyer is pre-approved to own more than one home at a time then they might not need a contingency. That said, just because they do not need the contingency does not mean they might not want it. Discuss and run down the what if scenarios using real life worst case scenarios as a measure.

Remember that everyone has a different feeling on risk analysis and do not let your feelings overpower the clients. Even when the market is bright they may still worry about carrying more than one mortgage at a time. The other thing to remember for buyers is when writing an offer contingent upon the sale it does degrade the offer. With all contingencies they protect the buyer but make the seller think more about accepting the offer with those terms.

For sellers who are thinking about accepting an offer with a home sale contingency there are several things to look at. One important thing would be what is the home they are trying to sell and how much for. Asking yourself if this is realistic in the current market? If not then you might want to think twice of accepting their offer. Another thing to think about is timeline.

You want to make sure for your clients that they have a timeline for when they can kick the buyer out if they do not sell their home. Sometimes we even add a kick out clause allowing us to further market the property looking for other buyers. If we find a new buyer with this kick out it allows us to demand the buyer drop their home sale contingency or the seller can move on to the new offer.

As you can see there is a lot to know about home sale contingencies. This blog should help you get started in better understanding how this tool can help you land more deals. Make sure to share this blog with anyone you know in the real estate industry.


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