Contingent Sale Offers

When the real estate market turns from a sellers’ market to a buyers’ market, the number of contingent sale offers rises accordingly. Because buyers are in a better position to leverage their negotiating power, they often include a clause in the purchase contract that provides an out (along with a return of the deposit) if their existing property does not sell.

From a seller’s standpoint, this may seem like a terrible contract to enter. But when the housing market is not in your favor as a homeowner, you often have few options. One way to ease the impact of such an agreement is to include a release clause–also called a kick-out clause–that allows you to continue to market your home under contract. If you find another buyer willing to sign a more favorable contract, the original buyer must remove the contingency clause within a specified period of time (usually 48-72 hours). If not, you are free to move ahead with the other buyer.

A final word of caution on contingent sale offers for sellers: be sure your buyer has not entered into a contract with a buyer for their home that also includes a contingent sale clause. You never want to be a link in a chain of contingent sale contracts.