Contingency Timing: How to best manage a concurrent home sale and purchase

For several years many home owners have felt a bit trapped in the homes that they bought in the late 1990’s and early 2000’s while they waited for the value of those homes to rise above their mortgage debt. And while they waited, life rolled on. Families have grown or contracted, individual economies have changed, lifestyles have evolved. With interest rates remaining historically low and increasing numbers of home owners finding that they are no longer under water, many have begun feeling more free to make a move to a home that is more fitting with their current needs and desires. A growing family finally has the ability to sell their home and move into a larger one; a couple who has spent the last few years getting their kids through college can take advantage of current conditions and move into a chic condominium requiring considerably less care and maintenance; or an individual who has been commuting 50 miles each way to work can finally move to a community closer to her job, adding significant benefit to her lifestyle. Selling or buying a home is complicated enough. Doing both at the same time requires pre-planning and flexibility befitting the Flying Wallendas!


When you purchase a home based upon your current home selling, that is considered a contingency sale. Your commitment to close on the home your purchasing is contingent upon the close of the sale of your current home. In a sellers market contingency sales are not very common. In a buyers market, or in a balanced market  similar to what we’re seeing now, contingency sales are becoming a matter of course. So how do you get through it with the least amount of stress? Follow these five contingency transaction tips:



1)  Other than general research to see what types of homes are selling in your price range, don’t start seriously looking for a home to purchase until your current home is under contract and through, or nearly through the inspection period. Most sellers won’t consider a contingency offer until most of the reasons a sale falls through have been checked off the list. If your home has been inspected and repairs agreed upon, the appraisal has been completed, the lender for the buyers of your home is well into underwriting the loan, and you, yourself have a solid pre-approval to purchase, then your contingency offer has a good chance of being accepted. This is true whether you are purchasing a resale home, or a new build.

2) Try to arrange a place to store your stuff and your family for at least one week after the closing on the sale of your home. While it is possible to have a double closing, in which the sale and purchase transactions close on the same day,  there is a lot that can go wrong. And as soon as you can’t close on the sale of your home on the contract closing day (due to a lender error, title issue, etc.), you are in breach of your purchase contract on your new home, particularly if you are using proceeds from the sale of one home to purchase another. Moving twice sounds incredibly stressful, but with moving pods and other services, you can create a less worrisome process by building a bit of a buffer between closings.

3) Work with a Realtor who can help you determine whether a contingency offer on your home is one that is likely to allow your own contingency purchase to go through. There is a lot that a good real estate agent can do to research the viability of a contingency offer, and to make your own contingency offer strong, increasing the likelihood that it will get accepted.

4) Develop a timeline with your Realtor that helps you keep track of the milestones of each transaction. Remember, you’ll have timelines for inspections, appraisals, document submission, walk-through’s, signings, etc. for TWO transactions. While you should feel completely confident in your agent’s ability to manage all of these details, it helps to have your own working calendar to help you with the details of your move(s).

5) Know that there have been times in the housing market when the majority of homes sales were contingency sales. There could be 8 transactions lined up between buyers and sellers that start with the successful close of  one home sale, and dominoes from there. And most of those transactions work out just fine. While it sounds complicated, if you’ve got a solid team of professionals, there’s no reason that you can’t sell a home that has served you well, and buy one that will serve you better.


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