Selling a Home on Contingency

Sale pending on sign picture

Most of us cannot afford to own two homes in California at the same time.  A common concern among home sellers is finding a new home while also trying to sell their current home. However, how do you sell your existing home without going homeless until you find a new home?  One possible approach is to make the sale of your current home contingent on you finding a new home to purchase.

In theory, this sounds easy enough, but it is a bit more complicated than first meets the eye.  Selling your home in the current market is often the easier part of the transaction. In many cases, it will take longer to find that perfect replacement home than it does to sell your current home.  However, when we find that perfect home for you, your offer will be much stronger with your home already on the market than it would be if you waited to find a new home to replace it first.

When you go to buy your new home, we will add a contingency into your purchase contract that requires your current home to sell as well before the purchase can close.  When your home is listed in the MLS, we will add comments within the agent areas that make sure that they know your sale is based on finding a new home as well.

In the best possible case, you will get the keys to your new home 48 hours before you have to give up the keys to your existing home.  This way, you’ll have a day or two to move out of your old home and into your new one.

Sale Failing diagram

It is important to note, though, that adding contingencies can be risky.  The biggest risk you will face is that if one of the deals does not work out, all of the deals in the chain fail to happen.  If this happens to you, you could be forced to start the entire process all over again.  You will also have to eat the costs of any inspections or appraisals you have already paid for during the process.  Having McBride & Associates evaluate the risks in the chain to you and putting in contractual language to protect would be part of our negotiation strategy.  Remember, you only get what you ask for.

Having us as your partner though the journey will take some of the pain out of this type of transaction for you.  We will work with all of the parties involved in the deal so that we can coordinate everyone’s efforts.  In some cases, both deals may be able to go through the same escrow company, simplifying the process even further.  Get in touch with us today to learn more about contingency purchases and sales.  We will make sure that you understand exactly what is involved before entering into this type of arrangement.