Breaking down Real Estate terms in plain English: Home Sale Contingency

When buying or selling a home, there are a lot of terms that can feel confusing at first. One you may hear is home sale contingency. This simply means a buyer’s purchase of a new home depends on their current home selling first. It is a way for buyers to protect themselves financially so they are not responsible for two homes at the same time.

If you are a buyer who needs to sell your home before purchasing another, you may include a home sale contingency when writing an offer. This allows you to move forward on a home you are interested in while your current home is getting ready for the market or moving through the selling process. Sellers often want to see that your home is already listed or ideally under contract, since that reduces uncertainty and helps the transaction move forward more smoothly. There are also other options, such as a bridge loan, that may allow you to write an offer without a home sale contingency. That is a separate topic I will cover in another 'What Does It Mean' post.

If you are a seller reviewing an offer with a home sale contingency, it means the buyer’s ability to close depends on their home selling. This does not automatically make the offer weak, but it does add another layer to the transaction timeline and some risk. In some cases, as the seller, you may continue showing your home and include a clause allowing you to stay on the market and potentially accept backup offers. Situations like this are very common, which is why it is so important to have a real estate agent who can help you understand what these terms mean, how they may affect your sale or purchase, and what is best for your situation.

If you are currently navigating a contingency or contingent transaction, reach out to your agent to talk through the details. If you are thinking about buying, selling, or building and want to discuss how this might work, I would love to help!