A home sale contingency is a type of contingency clause that’s commonly included in a real estate sales contract. In the event that a home sells by a certain date, then the contract ends up moving forward. On the other hand, if it doesn’t sell, then the contract is officially terminated.
In terms of this, there are considerations to keep in mind for both buyers and sellers.
For buyers, many of them need to sell their homes in order to purchase a new one. A home sale contingency will enable them to have the time they need to be able to sell and settle prior to making a commitment to purchase a new home. Buyers will be able to avoid owning two homes, as well as holding two separate mortgages at the same time while also waiting for their own home to sell. This type of contingency will also allow for a transaction in the sense that the buyer will be able to sell one one while also moving into the next one since their new home is already technically locked in. On the other hand, the contingency doesn’t necessarily avoid other costs involving buying a home, as a buyer must still spend money on factors such as bank fees, appraisal fees, and home inspections. In the event that the deal ends up falling through due to the property not selling on time, these expenses will not be refunded.
Sellers, on the other hand, are more at risk with a home sale contingency due to the fact that there is really no guarantee that their home will end up selling. Even though the contract may permit the seller to continue marketing the property and accepting offers, it may still be listed as being under contract, thereby deterring other potential buyers. Those who are looking for homes will end up staying away from properties that are under contract due to the fact that they don’t actually want to take the time to risk looking at a property that they won’t really have the chance to purchase.
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