Making an Offer Contingent on the Sale of Your Home in the Bay Area

Contingent Purchase Offer

The journey to homeownership is filled with excitement, anticipation, and sometimes, a fair bit of complexity. Selling your current home while purchasing a new one can present unique challenges. However, with the right strategy, you can navigate this process effectively. One such strategy is making an offer contingent on the sale of your home.  This can be a little complicated, and this article will help you understand everything you need to know about making an offer contingent on the sale of your home in the Bay Area.

This article delves into the intricacies of real estate transactions involving sale contingencies, offering insights on how to make them work for you. We will also explore the pros and cons for both buyers and sellers, as well as alternatives to consider.

Understanding Contingencies in Real Estate

In real estate, a contingency is essentially a condition that must be fulfilled for a sale to proceed. If the condition isn’t met, the buyer or seller can usually back out of the deal without any legal repercussions. Common contingencies include home inspection, appraisal, financing, and title search.

Contingencies are designed to protect both parties involved in the transaction. For instance, an inspection contingency allows the buyer to cancel the deal if a home inspection reveals significant issues with the property. Likewise, a financing contingency gives the buyer the right to back out if they are unable to secure a suitable mortgage4.

Home Sale Contingency: An Overview

A home sale contingency is a specific type of contingency that stipulates the buyer’s offer is contingent on the successful sale of their current home. This type of contingency is particularly beneficial for buyers who cannot afford to carry two mortgages simultaneously.

If the buyer’s home doesn’t sell within the agreed-upon timeframe, the sales contingency allows them to back out of the deal and recover any earnest money deposited.

Types of Home Sale Contingencies

There are generally two types of home sale contingencies: sale and settlement contingency, and settlement contingency.

Sale and Settlement Contingency

A sale and settlement contingency is applicable when the buyer’s home is not under contract yet. This type of contingency allows the seller to continue marketing their property to other potential buyers. If another offer comes in, the initial buyer gets a specified period (usually 24-48 hours) to remove the contingency and proceed with the purchase. If they can’t, the contract is terminated, and the seller can accept the other offer.

Settlement Contingency

A settlement contingency comes into play when the buyer’s home is under contract, and the transaction is progressing towards closing. This contingency offers protection to the buyer if their home sale falls through for any reason. If the buyer’s home sells by the specified date, the contract remains valid. If not, the contract can be terminated.

For Best Results

Weighing the Pros and Cons: Perspective of Buyers and Sellers

Both buyers and sellers need to understand the advantages and potential drawbacks of home sale contingencies.

Buyers’ Perspective


  • Financial Protection: Home sale contingencies protect buyers from the financial burden of carrying two mortgages at once
  • Seamless Transaction: With a home sale contingency, buyers can synchronize the sale of their current home with the purchase of the new one
  • Earnest Money Security: If the deal falls through due to the buyer’s home not selling, they typically get their earnest money back


  • Offer Attractiveness: In a competitive market, sellers may be less inclined to accept offers with a home sale contingency
  • Time Pressure: Buyers are under a time crunch to sell their current home, which can be stressful

Sellers’ Perspective


  • Potential Sale: Any offer means a potential sale. If the seller’s property has been on the market for a while, an offer with a home sale contingency may be welcomed


  • Uncertainty: Sellers face uncertainty as their sale depends on another home’s sale

Missed Opportunities

If a potential buyer’s home doesn’t sell, the seller has to re-start their selling process

Sell your home in a weekend

Making a Contingent Offer Attractive: Strategies for Success

While home sale contingencies can be challenging, there are ways to make them more attractive to sellers. Here are some key strategies:

List Your Current Home Before Making an Offer

Before making an offer on a new home, ensure your current house is on the market. This shows sellers you are serious about selling your home and moving forward with the purchase.

Prepare Your Home for a Quick Sale

Ensure your current home is ready for a quick sale. This includes addressing any repair issues, enhancing curb appeal, and staging it attractively for prospective buyers.

Offer More Than the Asking Price

In competitive markets, offering more than the asking price can make your contingent offer more appealing to sellers.

Include a Kick-out Clause

A kick-out clause allows sellers to continue showing their property and accept other offers. If another offer comes in, the initial buyer has a specified period to complete the purchase or back out.

Alternatives to a Contingent Offer

If a home sale contingency isn’t feasible, there are other options to consider:

  • Extended Closing
    • Request an extended closing to allow more time to sell your current home
  • Bridge Loan or HELOC
    • Utilize a bridge loan or a Home Equity Line of Credit (HELOC) to finance a new home before selling your current one
  • Rent-Back Agreement
    • Sign a rent-back agreement to stay in your current house while buying a new one
  • Sell and Move Short-term
    • Sell your current house and move into a short-term rental while buying a home

The Bottom Line

Buying a new house when you also need to sell your current one can be a complex process. However, with the right strategy and expert guidance, it’s definitely achievable. By understanding real estate contingencies and knowing how to leverage them, you can navigate this tricky terrain with confidence. Remember, every real estate transaction is unique. Therefore, it’s essential to work with a knowledgeable real estate agent who can provide tailored advice and guidance based on your specific situation and the local market dynamics.

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About the Author
Seb Frey helps long-time Bay Area homeowners make their next move easily the next one yet. If you're looking for a minimum of hassle, maximum net cash on sale, and certain results, contact Seb today.