How To Buy A Home While Selling Your Own| Home Sale Contingency
If you are selling your home, should you accept a contingent offer from a buyer? Well, that is what we are talking about today, and we will get started right after this.
Hello, and welcome back to my channel, I am Ledeana Strand with Homes By Strand, powered by Remax town and country in Port Orchard, Wa. If this is your first time here, consider subscribing to my channel, and hitting that bell to be kept up to date on all things real estate in Kitsap County, Wa. Pro tip, you are going to want to stay to the very end of this video, as I will be sharing with you on how to get your FREE copy of my Ultimate Home Sellers Guide, so you definitely want to stick around.
So you’re selling your home and you get a great offer, full price. The buyer’s not asking you to pay any closing costs or warranty or anything, but they have a contingency. They have to sell their home first. So, what does this mean for you and should you accept the offer?
Whether you’re buying or selling a home, contingencies can help manage the risks involved in a contract. If you’re a buyer and you’re adding contingencies to the offer, they may lower your risk of losing your earnest money deposit should you not be able to perform and close on the home. But they can also mean that you might not get your offer accepted. Sellers, On the other hand are taking on more risk with most contingencies as it gives the buyer a way to get out of the contract if they don’t perform.
So, here in Kitsap County, typically how a buyer contingency on the sale of a home would work, is once the home goes under contract, the seller then still can take backup offers on the home. Now, if they get a much better offer, they can’t just kick that contingent buyer out and take the second offer. There’s a process that has to happen. So once that second offer comes in, the seller then notifies the first buyer with the contingency that we have another offer on the home, that first buyer with the contingency then needs to determine, do I need to cancel and ask for my earnest deposit back, or is there a way where I can remove the contingency and still be able to close escrow on the home? In many cases, that buyer may have to come up with some creative financing or come up with more money, but in some cases the buyer can qualify for both homes.
But they put the contingency on there just because they didn’t want to have that burden of having two house payments.
Now, if you’re a seller and you take an offer for a buyer contingency, you have to realize that you’re taking on some more risks, and that first buyer may cancel. So, if you’re a seller and you’re looking at possibly accepting an offer that has a buyer home contingency, you’re going to want to look at contingencies that are further along in the process so that you can lower your risk, it’s going to be more likely that the buyers home is going to sell and thus you’re going to close on your home.
So, a contingency on the sale of the home can be a great tool for buyers and sellers to come together on a contract. But they do come with risks and tradeoffs. So, if you are a buyer considering putting out a contingent offer, or you’re a seller considering accepting a contingent offer, it’s really important to work closely with your realtor and talk about the pros and cons and how they affect you before you move forward.
I hope that information helps you better understand contingencies and if you’re a buyer or a seller, if you should consider making an offer or accepting an offer that has a contingency on the sale of the home. If you have any questions, go ahead and put them in the comments below or reach out to me anytime. I’m happy to answer any questions you have.
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