The National Association of Realtors found that by 2018, homeowners averaged about 13 years in the same house before selling. The reasons people move vary, but it’s most commonly due to lifestyle changes.

Young couples may need a larger house due to their growing family, while empty nesters want to downsize. Some people move to another home and even another city and state due to employment changes. Regardless of the situation, buying another house while waiting for your current one to sell can be stressful when two mortgages are involved.

It would be nice if the money made on the present house would pay for the next one in total, and maybe you can do that, but many can’t. According to Forbes, over 60% of homes in 2017 had mortgages. So, if you are shopping for a new home while waiting on your current one to sell and are concerned about paying two mortgages for a while, you don’t have to be. This article explains how to buy a house contingent on selling yours using a contingency offer.

What is a Contingency Offer?

A contingency offer is an agreement between a buyer and seller to follow through with the sales transaction after one or more specific conditions are met. Contingencies are essentially a contract within the sales contract usually requested by the buyer. According to the National Association of Realtors, 71% of homes that closed in February 2020 had contingencies.

A contingent house sale usually favors the buyer. It allows buyers to enter into a contract on a home without committing to the purchase, and another mortgage, until the contingencies are met. As a result, most sellers aren’t fans of contingency contracts because they delay the sale by the time it takes to fulfill the conditions. Also, the sales momentum is somewhat stalled as some buyers will move on to their second or third choices for a new home instead of waiting around to see how the contingency offer plays out.

To maintain some control, sellers can use bump clauses to limit the amount of time spent waiting for the fulfillment of the contingencies.

contingent home sale

Bump Clause

A bump clause, also known as a kick-out clause, is often negotiated into a contingency offer by the seller to have some leverage to counter the buyer’s contingency contract. Otherwise, the seller will lose opportunities to sell while waiting on the buyer to take care of the contingencies, such as selling his house first.

Here is an example of how a bump clause helps the seller:

Let’s suppose a buyer makes an offer that includes earnest money on a home contingent upon the sale of his current home. So, what does contingent mean on a house for sale? It means the buyer will follow through with the purchase, but not until his current house sells. In the meantime, the seller receives another offer and it’s without contingencies.

Under the terms of a bump clause, the seller must notify the previous buyer and see if he will waive the contingency of selling his current house and execute the purchase. If the buyer won’t, the bump clause allows the seller to refund the first buyer’s home sale contingency earnest money and accept the second buyer’s offer.

Can you make an offer on a contingent house?

The short answer is yes. But, before you go all-in on a contingent house, you should think about two components of a real estate deal – time and money.

Time: Suppose you find your dream home and decide to make an offer on it, although someone has already submitted an offer contingent upon their house selling. While you are waiting for the sale of house contingency to expire, the seller could be considering other offers.

It could be thirty days or more before the contingency expires. Besides, there aren’t any guarantees that your offer is generous enough to be accepted. There are no guarantees the contingency will expire – the buyer’s house can sell at any time.

In an active market with low inventory, this could be a huge blow to your excitement of buying a new home. While you were waiting for a month to see if your offer was accepted, other buyers were making offers on some comparable houses. If you are in an active real estate market and the inventory is low, you may have difficulty finding another dream home when your search starts over thirty days later.

Higher Cost: Let’s use the same example above, except the buyer who submitted the contingency offer isn’t successful this time. His offer is no longer valid, and now the seller – again, thirty days later – is reviewing the other offers they received.

With your agent’s help, you realize the original buyer likely made a substantial offer so the seller would be willing to accept the contingency. In addition, the seller’s agent told your agent they had received several offers during the thirty days the contingency offer had precedence.

This house checks all the boxes for your family, and you don’t want it to get away. So, you and your agent strategize and decide to make an aggressive offer. In the end, the contingency offer was withdrawn, and your offer was accepted because it was the highest.

The first buyer made a generous offer because of his contingency. This set the pace for all other offers, and you paid more than you probably would have if not for the initial offer.

What are the different types of contingencies, and what do they mean?

What does contingent mean on a house for sale? According to Bankrate, five of the most common contingencies  are:

  • Mortgage Contingency – A mortgage contingency clause specifies a window of time when the buyer must obtain financing to purchase the home. If the buyer can’t secure the loan by the deadline, they can withdraw their offer. The seller is free to accept other offers.
  • Title Contingency – A title contingency gives the seller the right to perform a title search to reveal any easements, liens, unpaid taxes, or other claims. The buyer may not feel comfortable with the results and this gives them a chance to back out of the sale.
  • Home Inspection Contingency – A home inspection contingency clause gives the buyer a specific amount of time to have the property professionally inspected. If any serious issues, such as water leaks, faulty electrical, structural issues, or a bad roof, are found, the buyer may ask the seller to make the repairs. If the seller refuses, the buyer is free to retract their offer and walk away.
  • Appraisal Contingency – An appraisal contingency ensures the property appraises for at least the sales price. If it doesn’t, the contract can be voided, or the seller can lower the price. Appraisal contingencies help buyers obtain financing by making sure the home is worth, at a minimum, the amount of the sale.
  • Sale of Home Contingency – A sale of home contingency allows the buyer to make an offer on a property while they are trying to sell their current home. This allows the buyer a specified amount of time to sell their existing home before finalizing the contract on the new one. This contingency prevents the buyer from having to have mortgages on two properties at once. If the buyer is unsuccessful in selling during the specified amount of time, the transaction gets voided, and the seller is free to consider other offers.

Tips to Sell Your Home

Knowing how to buy a house contingent on selling yours, it requires some hard work, time, and some luck. The sooner you sell your house, the more buying power you’ll have when closing the deal on your new one. Here are some general tips and tips for specific scenarios that will help you get your current house, and your next one, under contract.

tips for selling your house


Landscaping, visual appeal, and tidiness are the first three things interested buyers see when viewing your house. Take the time to get your home ready to sell so that you can sell quickly and at the price you want. This means making any necessary repairs. If the repairs cost more than you want to spend, you can find out more about selling a house that needs repairs.

Scenario #1: Your house is under contract and you’re looking for next house

If your house is under contract, you’ve likely been house hunting for a while now. Your current place should be packed and ready to move, so finding your next house is the priority. Otherwise, you may have to rent a home until you find one that you like. Moving twice is not only aggravating, it’s an additional expense.

Knowing the answers to these questions will help you and your agent find your next house:

  1. Is there a specific neighborhood that you wish to live in?
  2. What square footage or number of rooms do you need?
  3. Is there a specific budget you must maintain?
  4. Does the new house have to be a single story?
  5. How close do you want to be to work and school?

Knowing the answers to these questions will help you zero in on your next house. It will also help your agent understand your needs so you avoid wasting time looking at houses that don’t fit your needs.

Scenario #2: Your house isn’t under contract and you’re looking for next house

Trying to focus on selling your house while also finding your next one can be stressful and overwhelming. Interest rates are lower than ever right now, and in some areas there is limited inventory. This can be helpful as a seller, but the limited inventory can be more difficult as a buyer.

If you are trying to sell your house yourself, you must do your due diligence to establish competitive pricing for your market. For help with determining fair market value, check out our helpful guide.  You can also read our article on 17 tips to sell your house fast.

In Scenario #1, you narrowed down your search for a new home by answering five questions. These questions and answers will help you narrow down your new home search.

Scenario #3: Your house isn’t under contract and you found your dream home

In this scenario, you may be wondering how to buy a house contingent on selling yours. First things first, get the dream home secured with your offer. Make sure your offer is a generous one and that you include a sale of home contingency.

found your dream home

While most sellers will accept contingencies, you should know they do not like the sale of home contingencies because they delay the sale. The seller can’t accept other offers unless the contingency clause expires, which withdraws your offer. Sellers get paid more quickly when they have a buyer who is qualified for a mortgage and who isn’t waiting on a house to sell.

So knowing this, you have to make your offer appealing to the seller. You do this with a generous offer – more than you would offer if you weren’t waiting on your house to sell. You also may provide some other incentives for the buyer, such as being flexible on the time you give them to move.

The buyer and the seller agree to how long the contingency contract lasts, but expect no more than thirty days. Once you agree on the duration, it’s incorporated into the offer.

With your dream home under contract, you’ve got to be aggressive in selling yours. If you’ve been on the market for a while and aren’t getting any offers, you need to check your pricing. If you aren’t using a realtor, you should consider one because they have a broader influence than you, and will sell it more quickly than you can.

Even if you use proper pricing and a real estate agent, there is still an easier and quicker way to buy a house when yours hasn’t sold.

Selling your house to an investor and avoiding contingencies

Selling your house doesn’t have to be difficult, expensive, or time-consuming. Investors want to buy your home just like it is, and it won’t require a lot of time. With cash in your hand, you can make an offer on your dream home and avoid a contingent home sale. This means you’ll go to the closing table much sooner and won’t risk losing it to another buyer.

There’s an easier way to sell your house in California. To find out how, call SoCal Homebuyers at (951) 331-3844 today and receive a cash offer. Or, submit your information below if you want to sell your house for cash quickly, without closing costs, realtor commissions, escrow, or other fees and delays.

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