In order for most current homeowners to purchase a new home, they need to sell their current home. This is especially true when a buyer wants to move into a more expensive house.
However, trying to perfectly time a sale and a purchase can be difficult. Luckily, home sale contingencies provide protection to both buyers and sellers. Whether you’re buying a home or selling a home, it’s important to understand how contingencies work. They can have a direct impact on the process.
Here are the top five things you need to know:
- Home sale contingencies are dependent on the buyer selling their current home. If a seller accepts an offer with a home sale contingency, they can continue to market their home.
- The seller must give the buyer the opportunity to remove the contingency within a pre-determined time. Normally, this time period is 24-to-48 hours from the time the seller receives another offer.
- While home sale contingencies do provide sellers a level of protection, they can also pose some issues for buyers. Namely, if a seller accepts an offer on contingency, their house is listed as “under contract.” This can make it more difficult to attract other buyers.
- As a seller, it’s a good idea to ask your potential buyer if their home is on the market, how long it has been on the market, and how long other similar homes in the neighborhood have been on the market.
- As a buyer, you’ll still need to cover the expenses of the home buying process, such as appraisal fees. If the purchase falls through because you were unable to sell your current property on time, you will still be expected to cover these costs.
Ultimately, home sale contingencies are structured to protect the buyer from being on the hook for two homes. They also have measures in place to ensure the seller isn’t locked into a deal that can’t be completed.
Interested in learning more? Give me a call today.
