According to Investopedia, a leading source of financial content, “A home sale contingency is one type of contingency clause frequently included in a real estate sales contract (or an offer to purchase real estate)."
"With a home sale contingency in place, the transaction is dependent (or contingent) upon the sale of the buyer’s home. If the buyer’s house sells by the specified date, the contract moves forward; if it doesn’t sell by the specified date, the contract is terminated.”
When a contingent buyer is contracting on a new construction home with Ryan Homes at Brunswick Crossing, some differences exist in the way home sale contingencies work.
To start, your home doesn't have to be listed for sale when you sign the contract to start the purchasing process for your new construction home.
However, your home must be actively listed within the following seven days. As a bonus, your Ryan Homes sales consultant will have a list of recommended agents for your consideration.
Homes that are priced to the market and show well are selling quickly in our market area, so it’s likely that your home will receive an offer within the first 30-day contingency period. If an acceptable offer hasn't appeared by the end of the contingency period, you might be able to extend it for another 30 days with the help of your Ryan Homes consultant.
Your Ryan Homes consultant will review your listing to see if refreshed photos are necessary. They'll also ask about the feedback of home showings with you and/or your agent.
A reputable agent will never advise you to overprice your house for potential buyers to negotiate. However, if there aren’t enough good comparables in your neighborhood, pricing guesswork may be involved, so it might be necessary to reduce the price of your house if it hasn’t sold in the first 30 days.
You'll be able to choose a home site and fully price your new construction home even though Ryan Homes won't start building until you're no longer contingent. Should another non-contingent buyer want the same home site, you'll be given 72 hours to become non-contingent (if financially able and willing) or choose a different home site.
Ask your Ryan Homes sales consultant to fully explain how this part of the process works.
If you're not able to sell your old house, if the contingency cannot be extended, and if you're not financially able to remove the contingency, the deposit on your contingent purchase agreement can be refunded to you.
Types Of Contingencies In The Resale Market
The website continues on to explain the differences between sale and settlement contingency and settlement contingency.
“A sale and settlement contingency is dependent upon the buyer selling and settling an existing home. This type of contingency allows a seller to continue to market the home to other potential buyers, with the stipulation that the buyer will be given the opportunity to remove the sale and settlement contingency within a specified period...if the seller receives another offer.
If the buyer cannot remove the contingency, the contract is terminated, the seller can accept the other offer, and the earnest money deposit is returned to the buyer.”
A settlement contingency “is used if the buyer has already marketed [their] property, has a contract in hand, and a settlement date on the calendar. Because the property isn’t truly sold until...closing takes place, this protects the buyer if the sale falls through for any reason.
This type of contingency prohibits the seller from accepting other offers on the property for a specified period. If the buyer’s home closes by the specified date, the contract remains valid. If the home does not close, the contract can be terminated."
What A Contingency Means For Buyers & Sellers
Many homebuyers need to sell their current home in order to purchase a new home. A contingency gives the buyer time to sell their old home before moving into a new home.
This prevents buyers from owning two homes and paying two mortgages while they wait to sell their old home. Contingencies often work to the buyer's advantage.
On the other hand, contingencies are trickier for sellers because no guarantee exists that the home will sell. Investopedia notes that “even if the contract allows the seller to continue to market the property and accept offers, the house may be listed [as] under contract, making it less attractive to other potential buyers.”
The exact details of the contingency are outlined in the contract, so every move is different. Contact your new home sales consultant for more information about your transition.