When I am working with home buyers, there are questions that seem to come up fairly regularly. That is why I have chosen to write this series of FAQ posts - to help you wade through some of these questions to become a more informed home buyer.
What are "Contingencies"?
When a home buyer finds a home that they want to put under contract, sometimes they have extenuating circumstances. For example, they may need to sell their current home or break a lease. This can be written into their offer as a "contingency".
The Colorado Contract to Buy and Sell has a section specifically addressing the home buyer needing to sell their current home in order to obtain financing:
You can see that this section also states that the contingency should appear in "Additional Provisions". This is a separate section of the contract where it can be spelled out more specifically what the contingency is. For example, you may state that the sale of your existing property must be by a certain date. "Additional Provisions" is also the section where you would address a contingency involving breaking a lease.
A home seller can also have a contingency. This may take the form of the sale being contingent upon the seller finding a suitable replacement property, and is often stated in the listing.
One thing to be aware of if you are a home buyer with a contingency is that a seller may not accept it, especially if there are multiple offers. A home seller may see this contingency as a constraint and be unwilling to take the risk. Talk to your Realtor about the best way to present a contingent offer to secure your new home!
Got questions about Contingencies, or any part of the home buying process? Call me today! 720-341-5235
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