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Contingency contracts have changed a lot over the years. They used to have what was called a ‘kick out clause,’ meaning if you submitted an offer that was contingent on your house selling, the seller was also free to continue marketing their property. If they came back to your offer, you would have 24 to 48 hours to determine if you could purchase their property.
All of that has changed over the last several years. Now, if the seller accepts a contingency offer, that means they’re under contract. You’re not allowed to continue to market your home, and you remain under contract until the buyer is able to close on the house they need to sell.
That’s a big difference and should be a determining factor when deciding to accept a contingent offer. If, for example, I had a seller whose house has been on the market for a week and the showings have gone well, I would advise them not to accept a contingency contract—why hold up your house for someone whose house isn’t even on the market?
The same is true for the seller whose house has been on the market longer than the average for the area. A unique feature, the timing, or other factors could be contributing to its inability to sell. At that point, if a buyer wants to offer the seller a contingency contract, then accepting a contingency contract might be a viable option, as long as the buyer’s current home is in an area where it’s likely to sell quickly.
Whether or not you accept a contingency offer is ultimately dependent on the marketability of your house, how long it’s been on the market, and how willing you are to be tied down by the buyer’s house that hasn’t yet sold.
If you have any questions about contingency contracts or real estate in general, please feel free to reach out to me. I’d be glad to help in any way I can.