An offer lands on your table, but buried in it is a condition that could leave you waiting for months: the buyer needs to sell their own home first. A sale contingency protects the buyer, but it can stall your closing and your plans. Here is how to read it and what to insist on instead.
Quick Answer
A contingency is a condition that must be met before a sale closes, like financing, appraisal, or inspection. They protect you and the buyer but can also slow a deal or let a buyer exit. The deciding factors are which contingencies you accept and how you time them. Know your option period and deadlines so contingencies work for you rather than against your closing date. Ask Patrick about selling contingencies.
Types of Contingencies
The term: a contingency is a condition that must be satisfied before the sale closes.
The meaning: the common ones are financing, appraisal, inspection, and the home sale contingency, where the buyer must sell their current home first.
The money: each contingency carries deadlines, and missing them can let a buyer exit or reopen the deal.
The real-world consequence: the home sale contingency is the riskiest for you, because your closing depends on the buyer closing on a completely separate property.
Why Home Sale Contingencies Are Risky
The term: the risk is that your sale is tied to a chain of events you do not control.
The meaning: if the buyer's home does not sell, your buyer cannot close, and you could be stuck waiting indefinitely.
The money: every week the deal waits is another week of carrying costs, taxes, and uncertainty on your side.
The real-world consequence: a kick-out clause and a firm timeline are the protections that keep you from waiting forever on someone else's sale.
Better Alternatives
The term: alternatives are ways to accept a buyer who needs to sell without putting your closing at risk.
The meaning: a kick-out clause lets you keep marketing the home and, if a better offer arrives, gives your buyer a set time to remove the contingency or lose the deal.
The money: insisting on a firm deadline and a kick-out clause protects your timeline and your leverage.
The real-world consequence: know your option period and deadlines so contingencies work for you rather than against your closing date. Make it a great one, Patriot Nation.
Ask Patrick about contingencies
Get a straight answer on contingencies, timelines, and protecting your closing.
