3 Reasons Not to Work with a Contingent Buyer

By Home Bay

Posted on March 13th, 2017

A contingent buyer must sell their current house in order to be able to go through with their home purchase – a situation that can cause complications home sellers. If you’re selling a property, keep reading to learn about the potential risks of working with contingent buyers.


  • Reason 1 – You’re Dependent on Your Buyer’s Timeline:
    Contingent buyers usually have one of two possible clauses in the contract: a settlement clause or a sale and settlement clause. A settlement clause means the individual already has a buyer and is waiting for closing so that he or she can purchase their new home. A sale and settlement clause means the individual doesn’t have an offer yet – but that they must sell and settle the house before he or she can purchase your property. In this case, they will continue to market their property. The buyer can amend their sale and settlement clause and change it to a settlement clause once an offer has been accepted.

    In both situations, you must wait until the buyer completes a sale before your contract moves forward. That means that you may not be able to move quickly, and you may end up waiting for several weeks or even months before completing your sale.

  • Reason 2 – You May Have a Hard Time Finding a Backup Buyer:
    Sometimes, your contingent buyer will still allow you to market your property, even when you’re under contract. This can make it easier to move forward with a new buyer if things fall through. However, since your home will show as pending on the MLS, you not receive any new offers. Potential buyers may be dissuaded from touring your home because they know the odds of getting your property are low and they don’t want to commit themselves to the waiting game.

    It’s also possible that your contract will stipulate that you cannot continue to market your home once you’ve accepted your buyer’s contingent offer. In this case, you may be unable to take new offers until a set period of time passes or until it is clear that the buyer will not be able to purchase the property. Obviously, this can both make it difficult to plan and can be very frustrating if the sale ultimately falls through. Which leads us to our next point…

  • Reason 3 – Your Sale May Fall Through:
    A contingent contract allows your buyer to nullify their offer and walk away if their current home doesn’t sell or if their settlement falls through. As a result, you have a higher risk of your sale falling through when compared to working with other types of buyers.

    If you do decide you want to consider a contingent buyer, take the time to research their situation. Find out if they have already listed their current home and whether it is a fair price – and always walk away from the contract if their current home is not on the market or has not yet been listed.

By avoiding contingencies in your real estate contract, you limit the risk of your sale falling through and increase your chances of enjoying a smooth, stress-free home sale.

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Posted in Selling a House