This stress-free guide breaks down the process of buying a home with a contingent sale so you don’t get stuck with two mortgages—or lose your dream home. —-
“Contingent” can be a scary word, especially when it comes to something as serious as spending hard-earned savings on a house. It signifies something being conditional, being not locked down. That scary word, however, can save you from going into major financial stress when moving from one home to your next.
When families outgrow their former dream house and find a new one that checks all their must-have boxes, they’re faced with a problem: How to buy that new dream home without being stuck with the existing house’s mortgage?
A top real estate agent can help you put your home on the market and navigate the tricky waters of how to buy a house contingent on selling yours.
Here’s how to buy a house contingent on selling yours.
What a contingent home sale means, and how it works
When you buy a house contingent on selling yours, it means that you buy the house only in the case that your current home sells. Your agent will add a contingency clause to the terms of the home offer. Contingencies protect buyers from carrying two mortgages, and they can go in three ways:
1. You find a buyer for your home, and your contract for the new home moves forward as planned.
2. You don’t find a home buyer in a specified timeframe (usually 30 to 60 days), the offer and contract for buying the new home is voided. Buyers may return any money sellers put in, and you start fresh searching for a new house.
3. The sellers put an addendum into the contract known as a kick-out clause. According to R.C. Shea and Associates, sellers can keep their home on the market, and if they find a new buyer while you are trying to sell your house, they will give you 72 hours to continue the contract or drop out so they can accept the new offer.
The good thing about contingent home sales: You’re not alone.
In 2019, 48% of all buyers — and 71% of repeat buyers — owned their previous residences, according to data from the National Association of Realtors. Nearly half of all buyers are moving from one home they own to another, so buying a house contingent on selling yours is an everyday obstacle for buyers, sellers, and agents.
The game plan for how to buy a house contingent on selling yours depends on your place in the home-buying process.
Choose your own adventure by picking the path that shows your starting point:
- Your home is under contract and you’re looking for your next dream home (Proceed To Scenario A)
- Your home is on the market and you’re looking for your next dream home (Proceed To Scenario B)
- Your home is on the market and you’ve found your next dream home (Proceed To Scenario C)
- Your home isn’t on the market but you’ve found your next dream home (Proceed To Scenario D)
–Shared with love by the Valmy Team– your Texas realtor team. We would love to earn your trust and partnership, www.TheValmyTeam.com. All content copyright by the original authors.