Are home sale contingencies back?

It has been a whirlwind year in the world of real estate! The market has gone through lots of “chapters” this year, and the chapter we are in now is one of a slowing market in some micro markets throughout neighborhoods. When a market slows, lots of variables change for both buyers and sellers. One variable that has cropped up several times over the past few weeks is home sale contingencies. So let’s chat about what home sale contingencies actually are, and how to use them properly. 

What is a home sale contingency? 
A home sale contingency is something that a buyer can include in their offer that indicates that they will only buy the subject property if they are able to sell their current property in a certain amount of time. If they can’t sell their home, then the deal is off. 

Usually when the market is hotter/faster, home sale contingencies are not even considered because sellers can choose another offer without a contingency – thus making for a stronger offer. However, in the past three weeks we have had three offers accepted that include home sale contingencies!

The ideal home sale contingency timeline
The timeline I am outlining is ideal for both current buyers and sellers because it increases the probability for the buyer’s home to be sold. In Chicago, the spring market actually starts in January, so by listing then, the buyer is one of the first on the market to capture the wave of spring market buyers. 

September/ October: House hunt
November/December: Go under contract on the new property with a home sale contingency indicating that the buyer will sell their property in three months. 
Early/Mid-January: Buyer lists property
February-ish: Close on both properties!

Negotiation tools for sellers
In the end, a home sale contingency is just one of many negotiating tools. And actually a slower market makes it easier for us to try several tools to make a deal work for both buyers and sellers. We recently wrote a blog post for sellers outlining some of the tools available to them, which you can read here. 

Please reach out with any questions, contingencies can get confusing!