This fall, we’ve seen a lot of contingent purchase agreements. While most purchase agreements have built-in contingencies for financing and inspections, the contingency we’re referring to here is the home sale contingency.
While not unheard of, contingent offers in a hot market are not the norm, simply because a seller is more apt to roll the dice and wait for a non-contingent offer instead. With the market shift taking place this fall, however, we have noticed a common theme in the type of purchase agreements coming in. The past (now) seven purchase agreements we’ve received this fall have contained a home sale contingency. One of the reasons we believe this is happening so late in the market is that buyers have a strong desire to secure a home before sellers begin to pull their homes off the market for the holidays.
“Now that things have cooled down a bit, contingent offers have a far better chance of succeeding.”
The increased frequency of contingent offers may also have something to do with the low inventory we were seeing in the very recent past. While supply was depleted, it was difficult for contingent buyers to compete. Now that the market has cooled, contingent offers have a far better chance of becoming accepted by a seller.
From a seller’s perspective, though, the question remains as to whether such offers should be considered. As REALTORS®, we believe that at this time of year, accepting a contingent offer can be a good idea, with other considerations in mind. Ultimately, though, it will depend on the time of year you’re selling and the specific market conditions for both the seller’s home and the buyer’s backup home. Sellers should also remember that when it comes to accepting a contingent offer, they are driving the bus in terms of the length of the contingency.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.