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SOURCE: Windermere
Whether you’ve listed multiple homes or you’re a first-time home seller, you’ve likely come across the word “contingent” before. Contingent home sales, though very common, aren’t as simple as a real estate transaction without them. With contingencies, there are additional factors at play and added criteria that need to be met for the deal to go through. As a seller, being aware of these offers will help to inform your discussions with your agent once you know it’s time to sell your home.
What is a contingent offer?
Contingent offers in real estate give the buyer or seller the right to back out of the contract if the conditions aren’t met. There are different types of contingencies that determine what must happen for the deal to go through, which means buyers have options. Depending on their situation, whether they are selling their current home while making an offer on yours, unsure whether they can secure the right financing, or want to wait for the results of the home inspection before finalizing their offer, they’ll explore contingencies with their real estate agent as they build their offer.
This may feel a bit like buyers want to have their cake and eat it too, but every homeowner can understand the desire to protect their investment before fully diving in. In a seller’s market, there are fewer homes available, which means buyers will do whatever they can to make their offer stand out. Because sellers have the leverage in these market conditions, you’ll often see buyers waiving their contingencies. Talk to your agent for more information about the local market conditions in which you’re selling.
Should I accept a contingent offer on my house?
Each home sale is different, and each seller has a unique story. What you’re looking for in an offer may be different from what someone else in your neighborhood is looking for when selling their home. It all depends on your circumstances, your timeline, your next steps, and your local market conditions. The extra stipulations in a contingent offer require the attention of an experienced real estate agent who can interpret what they mean for you as you head into negotiations.
How often do contingent offers fall through?
Contingent offers can fall through more often than non-contingent ones, but there’s no general rule of thumb. Whether a sellers and buyer are able to agree on the terms of a deal is a case-by-case situation. Different contingencies may carry different weight among certain sellers, and local market conditions usually play a significant role.
Pros and Cons of Contingent Offers for Sellers
Pros: Accepting a contingent offer means you don’t have to take your home off the market quite yet, since the conditions of the deal haven’t been met. If the buyer backs out of the deal, you can sell without having to re-list. In certain cases, some buyers may be willing to pay extra to have their contingent offer met.
Cons: Home sales with contingent offers are usually slower than those without. It takes time to satisfy a buyer’s contingencies and additional time to communicate that they have been met. And of course, there’s always the risk that the deal could fall through.
As always, trust your agent for guidance when facing contingent offers. Connect with me today.
SOURCE: Windermere
