The traditional home sale process involves taking several steps and meeting milestones before a successful closing.  These steps include financing approval, the home inspection stage, gaining clear title, and more.

In this post I discuss the ‘home sale contingency’. This is a common, yet more complex, and not always easily understood contingency.

What does having a home sale contingency mean?

It means that the buyer who has approached the seller with an offer is still trying to sell their current home, has not closed on it yet, and needs time before continuing with the purchase. The buyer will make the seller a purchase offer and the seller accepts subject to them selling their present home first. The most common home sale contingent offers are:

• The property will stay on the market but the buyer will have a negotiable timeframe of a first-right-of-refusal notice to act on if the seller receives a better offer. The time will be agreed on in advance and can be anything from 24 hours to a few days. If the seller has another offer the buyer has that amount of time to remove the contingency or then the seller has a right to cancel the contract and return any deposit that has been placed.
• The seller takes the property off the market and gives the buyer a time frame for selling their existing home. If the buyer has not managed to sell by the end of the allotted days the buyer can cancel the contract, receive the deposit back and the seller will have to find another buyer.

If you are the buyer with a contingency it might be a good idea to be prepared with the financing if you don’t want to lose the home in the event of not having sold your existing home in time. 

Once contingency is removed (according to the terms agreed upon), the seller will need proof that the buyer has the funds available to close.

Contingencies of this type can get complicated, as there are expectations, and timetables to consider. I understand the intricacies involved and help my clients from the negotiation stage, to the close table, and beyond.