Purchasing a home can be tricky business. Many times it can be a balancing act, especially if you’re trying to sell your home and purchase a new one at the same time. There are many moving parts with one transaction, let alone two. One option for homebuyers to look at could be making an offer based on contract contingency of the purchase of their current home.
Many buyers are looking for a home prior to putting theirs on the market. People do this because they know where they want to move. But most people don’t enjoy moving twice. If this is your case, the ability to buy and have a contingency clause is the way to go. Working with a Realtor who can get your home on the market quickly and help price it competitively is what is needed in the current market.
Homebuyers can request that their new home purchase be dependent on the successful sale of their old home. In a competitive market, this may not be the best option. However, if the seller of the house you’re interested in has had difficulty attracting interest, this may be a good deal for all parties involved—assuming that you can persuade them that your home will sell quickly.
But what exactly does a contingent offer consist of? Our friends at Realtor.com describe it this way: “A contingent offer means that an offer on a new home has been made and the seller has accepted it, but that the final sale is contingent upon certain criteria that have to be met. These criteria, or contingencies, are clauses in a sales contract that typically fall under three major categories: appraisal, home inspection, and mortgage approval.
They continue: “Such contingencies are mainly put in place so that buyers can back out of a real estate sale if something goes wrong, usually without losing their earnest money deposit. A seller might entertain other offers after a refusal, but won’t deal with another buyer until the contingent offer is settled in one way or another.”
Another recent strategy is that buyers are starting to rent out their current homes which enables them to buy without selling and having an additional investment.
Feeling a little confused about what option is best for you and your family? Consult a Realtor so that you can understand which of these items might be best in this unusual and competitive time. Realtors are here to be your housing resource. That’s who we R®.