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Selling Your Home: Should You Accept an Offer with a Home Sale Contingency?

The highly competitive real estate market has driven buyers and sellers to think creatively, employing innovative strategies to gain a competitive edge and achieve success in today’s challenging market.
 When considering an offer, sellers should be aware that certain contingencies carry more risk than others.The further an offer is from a cash offer, the higher the risk. Home sale contingencies can be successful, but they come with higher risks compared to other contingencies. They can be worth considering if:
- It’s the only offer on the table and you’re facing a lack of interest
- The offer meets all of your other terms and conditions
As a home seller, it’s crucial to understand the implications and potential uncertainty of accepting an offer with a home sale contingency. This arrangement allows the buyer to back out of the purchase if they fail to sell their current property, leaving the seller with a stalled sale and lost time. In this article, we’ll explore the risks associated with home sale contingencies, the potential consequences for sellers, and alternative solutions to consider.
How Home Sale Contingencies Work
A home sale contingency is a clause in the real estate contract that makes the buyer’s purchase contingent on the sale of their current property. The buyer and seller agree on the terms, including the sale price, earnest deposit, home inspection contingency, appraisal contingency, financing contingency, and closing date. If the buyer fails to sell their property within the specified timeframe, the contract may be terminated or extended at the seller’s discretion.
Risks for Sellers
Accepting a home sale contingency offer can be shaky ground for sellers. By doing so, sellers have less control and may be left with a stalled transaction if the buyer’s property doesn’t sell. This can lead to issues including:
- Reversal of momentum
- Lost time and opportunity costs
- Uncertainty and stress
- Potential price reductions to attract new buyers
- Difficulty in negotiating future offers

Crucial Considerations
Before accepting a home sale contingency offer, sellers should consider the following:
- Is the contingent home priced correctly?
- What if the property doesn’t sell?
- What if the home inspection reveals significant issues?
Alternative Solutions
Instead of accepting a home sale contingency offer, sellers may want to consider the following alternatives:
- Request a larger earnest deposit
- Consider a bridge loan or temporary financing
- Negotiate a kick-out clause or right of first refusal
- Request the removal of this contingency
Kick-out clauses allow sellers to continue marketing their property and accept a non-contingent offer if one arises. Right of first refusal gives the seller the option to accept a new offer if the buyer’s contingency isn’t met.
Home sale contingencies can be a risky proposition for sellers. By understanding the potential consequences and considering alternative solutions, sellers can protect their interests and ensure a smoother transaction. Remember, it’s essential to prioritize control over the sale process and be cautious when considering contingencies. You can expect success when you navigate your real estate transaction and the potential challenges with a trusted agent by your side!
 John McHugh has been a Senior Agent with Coldwell Banker for 24 years. 978.902.5646
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