Posted on: 25 June 2018
If you are selling your house and receive an offer on it that contains a sale contingency, you may need to ask your real estate agent what this means. A sale contingency typically means that the buyer needs to sell his or her home before closing on your home. This can be a good way to sell a house, but you should understand the risks that you accept as the seller. Here are some of the risks you assume when accepting an offer that contains a sale contingency.
It will take longer to close on your house
The first risk is the amount of time it might take to sell your home. When you sell your house without a sale contingency, it might take 30 to 60 days from the day you accept the offer until you close on your house. If you decide to accept a sale contingency, it will take 30 to 60 days from the time the buyer closes on his or her home. Then, you must add in the amount of time it may take for the buyer to actually sell his or her home. If it takes the buyer three months to find someone to buy his or her home, you could be waiting for almost six months to close on your house.
The buyer might not be able to sell within the time listed on the agreement
In these situations, the buyer will add a time frame to the contract. For example, the buyer might state that the offer is good for 60 days. This means that the buyer has 60 days to sell his or her home. If the buyer cannot do that, the contract with you will be void. In other words, this sale will fall through and you will have to start over looking for a new person to buy your house.
The buyer will change their mind after selling their home
The other risk you have is that, even if the buyer sells his or her home, they might decide not to buy your house. If this happens, you might be able to keep the earnest money the buyer put down, but you would have to look for someone else to buy your house.
If you receive an offer that has a sale contingency, you should carefully think through the way you should respond to it. If you accept it, you will have to wait for the buyer to sell his or her home. If you reject it, you will be free to find another buyer right away. Talk to an agent if you are not sure how to handle this.Share