There are two types of contingent offers. How you handle either one depends on what kind of market you’re in.
Since our market has been changing the last couple weeks, I’ve seen more and more contingencies out there. What do you need to know about contingent offers? How should you handle them?
There are usually two types of contingencies: contingencies upon the sale of another property and contingencies upon the closing of an existing property.
The first contingency means that the house is either on the market or is about to go on the market, but there is no contract on it. This is a very open-ended contingency because we don’t know how long it could take for that property to
The second contingency means that the property is on the market, it has a contract, and there is a defined closing date. This contingency is a lot more typical in the marketplace. You see this a lot with move-up buyers who have a home
to sell and can’t qualify for both mortgages, so they get their house under contract and go find another house, and it’s still contingent on the closing of that property.
"HOW TO HANDLE A CONTINGENCY DEPENDS ON THE MARKET YOU’RE IN. "
How you respond to either contingency depends whether you’re in a fast-moving or slow-moving market.
If you’re in a fast-selling market (e.g. houses are selling in 90 days or less), I would not advise that you put yourself in a position to accept a contingent offer upon the sale of another property, but I would advise that you consider
a contingency on the close of an existing property.
If you’re in a slow-moving market, you have to weigh factors like how strong the offer is, whether you’re getting terms and conditions that are acceptable, and whether you can define the amount of time you’d give the buyer to sell their
property. A good amount of time would be 30 to 45 days to get their house under contract. If they’re giving you a good price, then it’s something you should strongly consider.
If you have any further questions about contingencies or have a topic in mind you’d like me to address in the future, please feel free to email me or give me a call. I look forward to hearing from you!