Our real estate agents understand there are many reasons you may not be able to purchase the home you want right away. The most common reason is that you want to wait until your home has sold. The fact is most buyers don't want to close on a new property until they have completed the sale of their current home. When a seller accepts your contingent offer, you will have first-right-of-refusal to either purchase or pass on the property.

Contingent Sale Offers

There are many types of contingent sale offers, including appraisal contingencies, mortgage approval contingencies, and inspection contingencies. The most common aresale and settlement contingencies, which are used when a prospective buyer's home is on the market, but an offer has not been received. The second most common is a settlement contingency which is for buyers whose home is under contract but has not closed.

Seller's Options Regarding Contingent Offers & First-Right-of-Refusal

Sellers have many options when it comes to offers involving a home sale contingency. They can choose to remove the property from the market and wait until your home sells. They can refuse the offer. And, they can provide you with the first-right-of-refusal.

When the seller opts to give you the first-right-of-refusal, they will keep the home on the market. Should another buyer submit an offer, the seller agrees to issue you a notice to perform. This gives you a set period to move forward with the purchase of the property. This period is usually 72 hours which means you must act quickly; otherwise, your desired property will be sold to the other buyer. If you choose not to remove your contingency, the seller has the right to cancel the contract and issue a refund of your earnest money deposit.   

Making a Contingent Offer

Generally, sellers do not want to accept sale and settlement contingency offers. When they do, it may be because the market is depressed or they need to sell quickly and have not received any competing offers. They are more likely to accept settlement contingency offers because the sale is more likely to go through because the buyer's home is in the late stages of escrow.

When making a contingent offer, you will want to submit a highly competitive bid for the property. If you are submitting a sale and settlement contingency offer, you can expect the seller to want to know how much you are asking for your current home. They will look closely at how your asking price compares to other homes in the area and how likely you are to sell your home for the price you want.

As a buyer, there are several steps you can take before submitting a contingent offer. You may attempt to be pre-approved for a bridge loan or secure a home equity loan before you put your home on the market. These options can give you the funding you need should the buyer receive another offer and issue you a notice to perform. It will also provide you with time to secure financing and complete the purchase or wait until you have sold your home and purchase another property.    

Contact us to learn more about contingent. It is our pleasure to answer your questions and help you find the ideal home for your family's future.