The Home Sale Contingency

Posted by on January 22, 2020 in Uncategorized | 0 comments

The Home Sale Contingency

You have a house. You want to buy another one. You can’t afford both payments so you have to sell your current house before you can buy a new one. You can sell it and then look for a new one but where will you live in the meantime? Will you pack and store your belongings and rent an apartment or stay with a friend or family member? Sometimes that’s the only option. Sometimes that is best to save more money and to give you an advantage over the competition, but it can cost you money to move and store your things. Another option is the home sale contingency. So what is it and what are the pros and cons?

The home sale contingency is a stipulation in a real estate purchase and sale agreement that the buyer’s current property must sell in order for them to be obligated to buy the new one. The property doesn’t have to be a primary residence. Often times a buyer is wanting to buy a house on the beach but they want or need to sell their lake house prior to closing on the beach house. It is a point of negotiation. A Seller doesn’t have to agree to accept the contingency. A Seller can agree to it with stipulations of their own. The Seller can give the Buyer a certain amount of time (typically 24-48 hours) in which to remove the home sale contingency if the Seller receives another acceptable offer. If the Buyer cannot remove the home sale contingency, then the Buyer must terminate but in most cases, they will receive their earnest money back.


The pros are mostly all in favor of the Buyer. The Buyer can move forward with the purchase of a new home without theirs being sold yet. This prevents them from having to move twice or being “homeless.”

For the Seller, in a Buyer’s market, this may be the only way certain homes will sell. If the Buyer is in control, a Seller may be lucky to get any contract and may be very willing to take a home sale contingency. Some Sellers actually agree to the home sale contingency because they haven’t found a new home and it gives them time to get one under contract as well. The risk of this is having all the dominoes fall when they’re supposed to.


Depending on the terms of the contingency, the buyer’s house could get under contract too late and the Seller may not extend the closing date, ultimately, making it necessary for the Buyer to go find another house or any number of variables.

A Seller now has to wait for another house to sell, very often outside their or their agent’s control before they can close on their current home. They are relying on another consumer and another agent to do what they need to do (market, clean/fix up, reduce price, etc.) in order for two houses to sell – and more if it is a domino scenario. Most of the time, showings will significantly reduce if not stop altogether once a house goes under contract, even with contingencies.

Here is how I advise my clients:

In a fast-paced market where my Buyer client’s home will likely sell quickly, I advise my Buyer to have the house ready to sell. This means we need to have the listing agreement signed, photos taken, and all necessary listing information and marketing materials ready so we just have to “press play” and it is on the market. Buyers need to make sure they are prepared to meet any time demands given by a Seller if they want the Seller to accept their offer with the home contingency.

I advise my Sellers to respond with a time demand for having the house on the market and even a date it needs to be under contract in order to agree to the home sale contingency. I also research the Buyer’s property and listing agent. I want to make sure I educate my client on the probability of sale, timing of sale, and the track record of the agent. Also, I would rarely advise my Seller to accept a home sale contingency in which their buyer is trying to sell their house For Sale by Owner. Bottom line is that a For Sale by Owner Seller just doesn’t have the access or ability for exposure like a real estate agent does. There can be exceptions, but it would have to be the perfect scenario for me to think it was not far too risky.

The home sale contingency can definitely work. It is just very important to know your options and risks, be very detailed in what is being agreed to, and listen to the advice of your trusted, professional real estate agent. If you have more questions, I am always happy to give my advice and opinion!

About Michelle Froedge
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur baby, Tyler, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.


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