Key information about contingent offers buyers and sellers need to know.
The term “contingency” is commonly used in the real estate industry, and it’s crucial for both home buyers and sellers to understand its meaning and implications on a sale.
Contingency essentially means that a sale is pending based on certain conditions being met. These conditions often involve an agreement between buyers and sellers. For instance, if a buyer makes an offer on a home, but needs to sell their current home first to use those proceeds towards the new purchase, the offer is contingent upon the successful closing of the buyer’s primary property.
Another scenario of a contingent issue arises when a buyer agrees to certain conditions and will only proceed with the purchase if those conditions are met. An example is a buyer agreeing to purchase a house contingent on a successful inspection or appraisal.
“Contingencies can affect both buyers and sellers in different ways.”
Contingencies can affect both buyers and sellers in different ways. For buyers, including a contingency may weaken their offer, especially if competing offers do not contain any. For sellers, a contingency can prolong the closing process due to the additional steps involved to meet the contract’s conditions. In some situations, it may even lead to a failed sale if one or more of the contingencies are not met, leaving the seller back on the market with no sale.
Contingencies in a transaction can introduce additional challenges when buying or selling a home. It’s crucial to fully understand the implications of a contingent offer before proceeding with any sale, and make sure to work with a qualified professional who can guide you through the process.
If you have questions on contingencies or need help with your real estate plans, call or email me. I’m always happy to help.
