Should sellers accept a contingency contract? Here are my thoughts.
The homeowners I represent often ask me, “Should I accept a contingency contract on my home?” That’s a big question, but first, we need to determine what a contingency contract is, and then we can talk about what factors to consider in terms of whether or not you should accept it.
For sellers in the state of Texas, there are contingencies across the board, sometimes even if it’s a cash transaction. Here are the big ones to note:
- Mortgage contingency. More than likely, your buyers are going to have a mortgage, and with this contingency, if for some reason they can’t get the loan approval, then they don’t have to buy your house.
- Inspection contingency. In Texas, we have something called an option period where your buyer will buy your house off the market while they get it inspected and negotiate repairs or further concessions, but they can still cancel for any reason. This is a huge contingency and it’s very rare that a buyer doesn’t pay for an option period.
- Appraisal contingency. With this contingency, if the appraisal comes in lower than the buyer’s contract price, the buyer is able to opt out of the transaction.
- Sale contingency. The most common contingency is one where a buyer’s contract on the home is contingent on the sale of the buyer’s current home.
With contingencies come risks, but depending on the competitiveness of your home and the number of offers on it, there are things we can do to get the buyer to waive some contingencies, which will minimize the risk for you. In any case, I would be there to guide you every step of the way to ensure you have the best outcome.
If you have questions about whether or not you should accept a contingency offer on your home or anything else to do with real estate, don’t hesitate to reach out to me. I would love to be a resource for you.