The "HOME SALE CONTINGINCY" WHAT YOU NEED TO KNOW...

Todays question is: "Can i make an offer on a new house when i still have to sell my old house to purchase the new house?"

The common catch 22 is you do not want to sell your house until you find a new house and cant buy a new house until sell your house....

If you need to sell your old house to get the money to purchase the new house, what you need is a seller who is willing to accept an offer with a home sale contingincy.

THE HOME SALE CONTINGINCY:

A home sale contingincy is a paragraph in the purchase and sales agreement that allows you to have an offer pending on a house, while the sale is contingent on you selling your house.

HOW DOES THIS WORK?

You make an offer on the new house, you include teh contingincy that this sale is contingent upon you closing on your home prior to purchasing this home. It is signed by you and the seller.
 
Most sellers or their agents will add a FIRST RIGHT OF REFUSAL CLAUSE. This is where they accept your offer but keep marketing the house. If you sell your home, the contingincy is removed and you close on this new home.

However if another buyer comes along and makes an offer with no contingincies, the seller gives you a 48 hour notice to remove the contingincy and close on the new home within a specific amount of time, usually 30 days.

If you have not sold your home and if you can not close without selling your old home, you are released from the contract of buying the new home and get your deposit back, then the house is sold to the new buyer that has no contingincy.

IN CONCLUSION:

While most sellers want to see your house under contract and all the contingincies met before they will accept an offer from a buyer, in this type of market, a seller will accept home sale contingincies as it gets them an interested buyer and a possible sale. For a seller it is better than no interested buyers and no possible sales.

As a home buyer you should still get preapproved before even looking for a home, once you get a preapproval then yiou can proceed with your search for a home. You dont want to make an offer on a home, put yours up for sale and then find out you cant get a loan.

AGENTS, SELLERS AND POTENTIAL BUYERS.... WHAT DO YOU THINK OF THE HOME SALE CONTINGINCY?

DO YOU HAVE ANY TIPS, SUGGESTIONS OR COMMENTS HOW IT WORKED OR DID NOT WORK FOR YOU? 

Updated August 5, 2010

Blog Written By:

Scott Godzyk
Godzyk Realty Group

Manchester NH