Should a seller accept an offer contingent on the buyer selling their home? Sometimes, but go in with your eyes open. You're tying your sale to a home you don't control, so protect yourself with firm deadlines and the right to keep marketing.
An offer that depends on the buyer selling their current home is a long-distance relationship. You're committed but the other half of the relationship is happening somewhere you can't see. You have no say in how their home is priced, how it's prepared, when it hits the market or how they respond to offers. Your closing depends on all of it.
That doesn't mean you should never say yes. In a slower market, a contingent buyer may be the best offer you get. But in Sachse, Wylie, Murphy and across North Texas, sellers who accept these offers should understand exactly what they're signing up for.
Jeanie Marten Real Estate is a brokerage, not a law firm. Nothing in this post is legal advice, and TREC rules prohibit brokers and agents from giving it.
How it works in Texas
In a Texas resale, the contingency is added with the Addendum for Sale of Other Property by Buyer (TREC No. 10-6). It sets a date by which the buyer's current home must sell and close. If it doesn't, the contract can end.
The addendum also gives you, the seller, an important tool: you can keep marketing your home. If you get another acceptable offer, you notify the contingent buyer, who then has a short window (set in the addendum) to drop the contingency and move forward, or step aside. This is often called a kick-out clause.
7 questions to ask before you say yes
- Is the buyer's home already on the market? A listed home with showings is a very different risk from one that isn't even prepared yet.
- Is it priced right? Ask your agent to look at the buyer's listing and its comps. If it's overpriced, your closing date is at risk.
- Is it already under contract? A contingent buyer whose home is already under contract is much safer than one still waiting for an offer.
- Can the buyer qualify without selling? If their lender will approve them without the sale, the contingency may be more of a preference than a necessity.
- How long is the contingency? Shorter is better for you. Tie it to a specific date, not "when it sells."
- How short is the kick-out window? A short response time means you won't lose a better buyer while the contingent buyer decides.
- What does your offer need to look like to be worth it? A contingent offer should be strong everywhere else: price, earnest money, option period and closing date.
What you give up
- Time. Every week your home sits under a contingent contract is a week it may look less fresh to other buyers.
- Momentum. Some agents and buyers skip homes that show as under contract, even with a kick-out.
- Control. Your moving plans, your next purchase and your timeline all depend on a transaction you're not part of.
When it can make sense
- The buyer's home is already under contract and past its own option period.
- Your home has been on the market a while and this is the strongest offer you've seen.
- The price and terms are strong enough to justify the risk.
- You're flexible on your own timeline.
The takeaway
A home sale contingency isn't a deal-breaker but it's a relationship you can't fully see into. Get the facts about the buyer's home, keep your deadlines short and keep marketing your home until the contingency is gone.
FAQ
What is a home sale contingency? It's a term that makes the purchase depend on the buyer selling and closing on their current home by a set date.
Can I keep showing my home if I accept a contingent offer? In Texas, the Addendum for Sale of Other Property by Buyer lets the seller keep accepting other offers. If you accept one, the first buyer gets a short window to waive the contingency or step aside.
Is a contingent offer ever better than a non-contingent one? Rarely on its own. It can be worth taking if the price and other terms are stronger and the buyer's home is already under contract.
If you found this useful, read these next
- The Option Period Is Where North Texas Deals Are Dying. Here's What's Actually Happening.: another point where deals fall apart, and how to protect yourself.
- What Actually Happens Between Under Contract and Closing Day: the full timeline your contingent contract has to fit into.
Got a contingent offer on the table?
Jeanie Marten Real Estate will look at the buyer's home, their listing and their numbers, and tell you honestly whether the risk is worth it. Call or text 972-414-0719 or email [email protected].
Sources: TREC Addendum for Sale of Other Property by Buyer (TREC No. 10-6)
[Jeanie: I couldn't open the addendum's full text, so the kick-out description is kept general. Please check it against the form. A short story from your own experience would make this post stronger.]
