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How Does a Contingent Home Offer Work?

Rhonda Duffy

It is a big decision to buy a home, and many people are nervous at the prospect of something going wrong with their purchase. If you do the work and make good decisions in the home buying process, then there is nothing to be worried about though. An experienced real estate agent can assist with the process, to keep you on track every step of the way.

Perfect Timing for Buying and Selling a Home

One thing that home buyers often worry about is whether their home will sell in time so that they can buy a new home. This timing matters, especially if you don’t want to get stuck paying two mortgages. In some instances, a home buyer won’t be approved for the financing on their new home unless the older home sells.

If you want to keep yourself protected, then you might consider a contingent home offer. This is a clause written into the contract that makes the home offer contingent to the sale of the buyer’s home. In the case where your old home sells by a specific date, then the contract on the new home moves forward. But, if your home doesn’t sell by that date, then the contract ends.

Types of Home Offer Contingencies

There are two main types of home sale contingencies that you might use, and your real estate agent can help you determine the best method for your individual needs. These are the two common types of contingencies:

  • Sale and Settlement Contingency: This contingency depends on the buyer selling and reaching a settlement on a home that they already own. The buyer might put an offer to purchase a home, but they haven’t received and accepted the offer on their existing home.
  • Settlement Contingency: If the buyer has a contract in hand for their existing home and a settlement date on the calendar, then the contingency clause might be based on the anticipated settlement date. This contingency protects the buyer since the property isn’t actually sold until the closing occurs.

It is a common occurrence where a buyer needs to sell their existing home before buying a new one. This home sale process is the right method that needs to be used if you want to avoid owning two homes at the same time, and the contingency helps to make it a seamless transaction.

Peace of Mind for the Buyer

A contingent home offer gives the buyer the peace of mind to know that they aren’t locked into buying the home if their existing home doesn’t sell. But, there are several other costs of buying a home that can’t be avoided. For example, you might spend money on a home inspection, appraisal fees, or other bank costs that can’t be refunded.

Do you want to learn the best way to sell your home and buy a new one at the same time? Contact us at Duffy Realty of Atlanta for more information about contingent home offers: (678) 318-1700