Selling Your Home? Why You Should Take a Contingent Offer

I work with buyers and sellers, and sellers these days are in a bit of a pickle...there's lots of inventory on the market, so getting an interested buyer is huge progress. So what do I do when buyers come with a contingent offer? I say take it, and here's why:

First, a contingent offer is one where the buyer has a property to sell first, before buying. That's most buyers except for those who can pay cash and/or own more than one home at a time, or renters who have nothing to sell. Basically, most buyers in most markets. So, a 'contingent' contract is one that states the buyer must find a seller for their property, first, before buying your property.

But before taking a contingent offer, I always make sure the buyer is doing what they should be to market their own property...is it priced right? Are the pictures online really good? What is their marketing plan? Have they had an open house? When the sale of YOUR home is relying on the actions of another, you want to be sure that the buyer is not dragging their feet. If the buyer is local, go see their house with your agent. Ask your agent if their pricing is realistic and if the agent has a good reputation in the community for selling property quickly.

Even though you may have a buyer, technically, being under a contingent offer means your agent can and should continue to aggressively market. You never know what cash-buyer or first-time buyer or renter may be interested. If they are and decide to put in an offer, you can then go BACK to the first buyer, and ask them to remove the contingency. That means, that you request that the buyer remove the contingent clause in the contract. For most buyers, that's not possible.

The reason they are contingent in the first place is that the need to sell first; most contracts give the buyer between 24 and 72 hours to prove (usually via a letter from a bank confirming funds) they can purchase the home without selling first...remember, you sign a legal contract with that first buyer, and that offer must be honored. Even if a buyer came along and offered five times the selling price, you would still need to honor the first buyer by requesting that they remove their contingency, and if they are not able? Then you can take any other offer that looks good.

More from this contributor:
The Top 5 False Assumptions Residential Home Buyers Make
Understanding Why Appraisals Are One of the Most Important Parts of a Home Sale
Creating Better Residential Real Estate Contracts by Including Contingencies