What is a contingent offer? Your home is on the market and an agent brings you a “contingent offer”… In general, that means the prospective buyer needs to sell their home before they can purchase yours. OR…you’d like to buy a home and need to sell yours first and to free up equity to buy (and hopefully not have two mortgages at the same time).
When it is a seller’s market, sellers will often turn down even the idea of a contingent offer, thinking that they can sell to a buyer who doesn’t need to sell. However, when it is a buyer’s market, and listings after been sitting on the market for weeks or months, sellers are often more receptive. If showings are slow and offers are not forth coming, why not take a chance and get your home in escrow?
Not all contingent offers are equal:
Sometimes a buyer will make an offer on their home before they have gotten their home ready to list. This is the weakest type of contingent offer. While there is contract language stating that this individual has five days to get their home listed, there is a lot of work to do making a home market ready and hiring real estate professionals.
Sometimes a buyer may have their home listed already. This is better, but begs the question: If I can’t sell my home, why is yours going to sell quickly and allow you to buy mine?
And lastly, a buyer has already sold their home and (has satisfied inspection and appraisal contingencies) and the offer is contingent upon the transaction closing. This is generally the strongest type of contingent offer. It is not guaranteed, however, no real estate transaction is until the deed is recorded.
In the last few months I have represented a seller who accepted a contingent offer and a buyer who had their offer accepted. When there is a desire to close a home sale and a purchase on the same day, that is known as a simultaneous closing. Potentially complicated, but very possible if the right real estate professional are in place.
Olympia Real Estate Blog 