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Sales Contingencies

How to Handle Sales Contingencies When Selling Your Home

If a Buyer has an existing home to sell, then the Seller must decide whether they are willing to accept a purchase offer with a sale contingency. Sale contingencies can often make a sale more complicated, but during certain occasions they can produce favorable results.

When a Buyer has a home to sell, the Buyer’s purchase offer should include a sale contingency addendum. This addendum generally gives the Buyer a reasonable amount of time to sell their existing residence, normally about 90 -120 days. By utilizing this addendum, a Seller can continue to market their property to other prospective Buyers.

As with any sale, contingencies tend to make contracts weaker; however, accepting a purchase offer with a sale contingency can sometimes be advantageous to a Seller. Sellers can utilize a Buyer’s contingency offer to raise the level of subsequent offers. Often, a Seller can often improve their negotiating position when more than one offer is available for consideration.

If a Seller receives a second offer, the Seller should not disclose the first Buyer’s purchase offer unless they feel it is an advantage to do so. We recommend consulting your attorney before accepting a contingency offer to make sure the appropriate legal wording is in your contract. Review our sale contingency addendum below to help you with the process.

Sale Contingency
Notice to Buyer
Removal of Sale Contingency

Before you accept a purchase offer with a sale contingency, ask the Buyer these questions:

  • What is your asking price?
  • Where is your property located?
  • Is your property already on the market?
  • Has your property been pre-inspected?
  • Have you had any Buyer activity?
  • How many days has your property been on the market?
  • What is the average market time it takes to sell a property in your neighborhood?
  • What measures are taking to market your property?

Knowing the answers to these questions will help you determine how far along the Buyer is with the home selling process. Tell them about our For Sale By Owner program!