The Contingency Offer

So You Found the Perfect House... But You Need to Sell Yours First

One of the most common situations we encounter is a homeowner who has found their next dream home but needs to sell their current home before they can complete the purchase.

In real estate, this is called a Contingency Offer.

Simply put:

"We will buy your house contingent on our house selling."

While some agents shy away from contingency transactions, The Alexander Home Team has extensive experience helping clients successfully navigate them. In fact, Stephanie and I personally purchased our own home this way back in 2016. We understand the challenges, the logistics, and most importantly, how to position your offer for success.

The key to a successful contingency offer is understanding one important question:

How strong is your contingency?

Every seller wants confidence that your home will sell. The stronger your position, the more likely a seller is to accept your offer.

The 5 Levels of Contingency Strength

Level 1: Your Home Is Not Yet On The Market

This is the weakest form of contingency.

A seller is essentially being asked to take their home off the market while you prepare your home for sale. At this point there are simply too many unknowns.

Questions the seller is asking:

• Is the home ready?

• When will it be listed?

• What price will it be listed at?

• How long will it take to sell?

Many sellers will be hesitant to accept this type of contingency unless market conditions strongly favor buyers.

Level 2: Your Home Is Listed For Sale

This is a step in the right direction.

The seller can now see that you are serious and actively trying to sell your home.

However, the next question becomes:

Is it priced correctly?

A seller will often evaluate your home's pricing strategy before accepting a contingency offer. If your home appears overpriced, they may worry it will sit on the market for months.

Level 3: Your Home Is Under Contract

This is where contingency offers begin to gain real strength.

Now the seller knows another buyer has committed to purchasing your home.

The risk is lower, but there are still hurdles ahead.

The buyer on your home can still terminate during the option period or inspection negotiations.

While stronger than simply being listed, there are still opportunities for the transaction to fall apart.

Level 4: Inspection Period Is Complete

At this stage, the contingency becomes significantly stronger.

The buyer of your home has completed inspections and has moved forward with the transaction.

Major concerns have been addressed, and the likelihood of closing has increased substantially.

Many sellers become much more comfortable accepting a contingent offer at this point.

Level 5: Past Appraisal

This is the strongest contingency position possible.

At this stage:

• The buyer is under contract.

• The inspection period is complete.

• The appraisal has been completed and approved.

Most of the major obstacles have already been cleared.

While nothing is guaranteed until closing day, the seller can feel much more confident that your home sale is likely to reach the finish line.

Pricing Matters More Than You Think

One of the biggest mistakes homeowners make when submitting a contingency offer is pricing their current home too aggressively.

Remember, you're asking another seller to trust that your home will sell.

The best way to create that confidence is to demonstrate that you're serious about selling.

A realistic and competitive pricing strategy can significantly improve your chances of having a contingent offer accepted.

If your home is sitting on the market with little activity, sellers may question whether your transaction will ever reach closing.

Experience Matters

Contingency transactions involve multiple contracts, multiple timelines, inspections, appraisals, financing deadlines, moving schedules, and constant communication between all parties.

There are many moving parts that must be coordinated carefully.

An experienced Realtor can help manage expectations, negotiate timelines, anticipate problems before they occur, and keep both transactions moving toward a successful closing.

At The Alexander Home Team, we've helped numerous Central Texas families successfully buy and sell at the same time. We've personally navigated the process ourselves and understand what it takes to make these transactions work.

If you're considering making a move but need to sell your current home first, we'd be happy to walk you through your options and help determine the best strategy for your situation.

Because sometimes the path to your next dream home starts with a well-structured contingency offer.

Brad & Stephanie Alexander
The Alexander Home Team – Keller Williams

Brad - 512-296-6817        Stephanie 512-749-5992        Office 512-361-1568

bradalexander@kw.com     salexander@kw.com           

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