Utilize a Contingency When Selling

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by Mario & Jennifer Ruiz  03/1/2019

If you want to buy before selling, make an offer with a home sale contingency, which means you will buy the new home once your current residence sells. You can also request an extended closing (if you’re certain your home will sell), which extends your closing past the…

 

Ideally, you would sell your home on the same day as buying a new one. Since this is not the case for most buyers/sellers, adding a contingency into the contract can be very helpful. It’s important to note that the term ‘contingency’ can have different meanings throughout the US. In this case a contingency is referring to a provision for an unforeseen event or circumstance when it comes to the financial ability to close a purchase sale.

 

If you want to buy before selling, make an offer with a home sale contingency, which means you will buy the new home once your current residence sells. You can also request an extended closing (if you’re certain your home will sell), which extends your closing past the typical standard of 30-45 days.

If you want to sell before buying, you can make an offer with a settlement contingency. This contingency works when you have an offer on your home, and you want to buy another which means you’ll buy the home contingent on the sale of your existing home.

If you happen to sell and haven’t made an offer on another home, you can sign a rent-back, which means you go through with the sale of your home, but you rent the home back from the new owners for a specific time (anywhere from 60-90 days), giving you time to find a new home or make other living arrangements.

 

There are pluses and minuses of both selling your home before buying, and buying a home before selling. Remember to do your research beforehand, consult your agent on your local real estate market, and if you need to, include a contingency in your contract.

 

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