Antonio & Alexia's Blog


What is a CONTINGENT OFFER on a house? and How Does It Work?

How can homeowners buy a replacement house before selling their present home? When a person who wants to purchase another house, using the proceeds from the sale of their existing house, they have to make an offer with the condition that their present home has to be sold first, hence the CONTINGENT OFFER.

When the seller accepts an offer contingent on the buyers selling their home, typically he gives the buyers 30 days to get a buyer for their house. The seller, however, keeps his house on the open market, even though he accepted the contingent offer. If the seller gets another offer that is non-contingent, (the buyer does not have a house to sell) the seller can accept it and give the first offer a 72 hour time limit to come up with a different type of financing that does not include the proceeds from the sale of their house.

Depending on the equity position of the homeowners, there is a possibility of obtaining a short term loan called "a Bridge Loan" this loan sometimes encumbers both properties, the old one and the new one, and the bridge loan has to be paid when the old property closes escrow. For most people, this is about the only way that they can purchase a replacement home.

These types of residential sales are quite common, most people have to play it safe and always have a place to live without having to rent for a while, which by the way, is another option. This scenario can happen if properly executed, do your homework in advance, find out if you can qualify for a bridge loan, prepare your present home and be ready to go on the market priced properly so you can quickly attract a good buyer.

There are two types of contingencies: An offer contingent on closing escrow, means you already have a buyer for your house, this is better than an offer contingent on selling the house. The second one means you have not even put your house on the market and have no buyer yet.

Finally, another option would be to put your house on the market first with a REVERSE CONTINGENCY, meaning you will sell your house, with this condition: that you find a replacement home within 30 days of acceptance of the offer, or you are not obligated to sell it. Remember that in real estate, everything is negotiable and possible, as long as you clearly understand your options and responsibilities. Make sure you get an experienced Realtor to help you write these conditions properly. Happy house hunting!


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Comment balloon 8 commentsAntonio & Alexia Cardenas • June 05 2013 11:04AM


Savvy post...and I like that idea of a seller contingency...have to find a replacement or won't sell.

Posted by Li Read, Caring expertise...knowledge for you! (Sea to Sky Premier Properties (Salt Spring)) over 7 years ago

I would be hard pressed in todays market to have a buyer write an offer where the seller has that contingency. My guess would be in most markets that would be (pun intended) a hard sell.

Posted by Dale Bledsoe, Realtor in Tracy, California (Crown Key Realty) over 7 years ago

I still do a few of these each year.  It does make marketing a bit harder and I explain that to the seller.  I also charge an extra fee if the seller is not actively looking for a new home.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) over 7 years ago

Li: thank you for your comment, I have done a few of those under those circumstances.

Dale: I actually had a listing where the seller have sold contingent on finding a replacement home... it took months! the buyer, however, hang in there and at the end had a house that was worth a bit more than when he made the initial offer.

Williams: This market is ideal for these types of sales, I am right now doing one exactly like that, what is the buyer to do? make the offer and wait, once the seller finds a replacement home, everything goes exactly like a normal transaction. There are benefits for both of them. Te seller can make an offer contingent on closing the escrow rather than on finding the buyer, so timelines are already in place and the whole little train can move forward.

Thank you all for your visit, I appreciate it


Posted by Antonio & Alexia Cardenas, "The Realtors In Motion" (Alameda County - San Leandro, CA.) over 7 years ago

Antonio - great post!! I just re-blogged it. We tend to forget about seller contingencies. These can work in all markets provided there is a meeting of the minds between the parties. 

Posted by Kathleen Daniels, Probate & Trust Specialist, Probate Real Estate (KD Realty - 408.972.1822) over 7 years ago

That is a great post Antonio! I am seeing more reverse contingencies on my local MLS lately because the inventory is low and sellers dont want be homeless!

Posted by Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR, Top Listing Broker (BROKER of Green Realty Properties® - 954-667-7253) over 7 years ago

Good explanation of a thorny issue. The loan, when it's needed, is often the tricky part.

Posted by Brad MacKenzie, Turning Houses into Homes on the South Shore (Brad MacKenzie) over 7 years ago

Kathleen, I am glad you found the information good enough to re-blog it. Most people do not know they can do the Reverse Contingency, this fast market is ideal for those types of contingencies.

Patty, On a slower paced market, there is no need for this type of condition on an offer, but right now is perfect and a secure way to move from one house to another.

Brad. Yes, I agree with you, the cost of a bridge loan can be expensive, however, when looking at the big picture it might not be that bad.

Thank you all for your visit!


Posted by Antonio & Alexia Cardenas, "The Realtors In Motion" (Alameda County - San Leandro, CA.) over 7 years ago