What a Contingent Sale Means To You As a Homeseller

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A house is listed for sale in Knoxville, TN.

Selling your home can be a complicated process, and it’s important to understand the different types of sales that may be available to you. One type of sale is known as a contingent sale, and it can offer some advantages for sellers while presenting some risks. In this article, we will discuss what a contingent sale really means to you as a home seller and explore the risks associated with such an arrangement. We will also provide tips on how to make sure that your interests are protected throughout the transaction. By understanding all aspects of contingent sales, you can make sure that selling your home goes smoothly and without any surprises down the line.

Contingent Sale

Contingent sale is an arrangement between a buyer and seller of real estate in which the completion of the purchase is dependent on certain conditions being met. A contingent sale usually involves one or more contingencies that must be resolved before the transaction can move forward. Contingent sales often take longer to complete than non-contingent sales, as both parties need to wait for the contingencies to be satisfied before closing.

For home sellers, a contingent sale can be an attractive option if they are looking for a higher purchase price or have other incentive offers on the table, as it allows them to negotiate with multiple buyers at once and potentially secure a better deal. The downside to this is that the sale may be delayed or even fall through if one or more of the contingencies is not met.

What is a Contingent Sale

A contingent sale is a real estate transaction that is contingent upon one or more conditions being met. These conditions may include the passing of an inspection, obtaining financing, fulfilling repairs, or other events before the purchase can be completed. In some cases, these contingencies are required by the seller in order to protect themselves from unexpected losses after closing.

When a seller lists their home for sale, they can decide whether or not to agree to a contingent sale. If the seller does accept an offer with contingencies, they will have to wait until all of the conditions are met before closing. This could take weeks or months, depending on what is being requested by the buyer.

How Does a Contingent Offer on a House Work

Contingent offers on a house, also known as contingent sales, are one of the most common methods used by buyers and sellers when entering into a real estate transaction. In essence, it is an agreement in which the buyer makes an offer to purchase a home that carries certain conditions or contingencies. Before they commit to purchasing the property, they need to have certain things accomplished first. These conditions must be met before the offer is considered fully accepted and binding.

When making a contingent offer on a house, there are generally three main contingencies used: financing, selling/buying another property, and/or appraisals. Buyers may include these contingencies as part of their offer to protect themselves from unforeseen problems or changes in circumstances that could prevent them from completing the purchase or make it less attractive for them than originally expected. This makes contingent offers attractive to buyers who otherwise may not feel secure enough to commit to purchasing a home without these safeguards in place.

When considering a contingent offer on a house, sellers should be aware that there is no guarantee that the sale will actually occur if all conditions are met—the buyer is still able to walk away from the deal if he or she so chooses for any reason even after all contingencies have been met. This can often be very frustrating for the seller who has already taken steps to accommodate any buyer requests such as staging for open houses or even repairing items listed on inspection reports. As such, sellers should keep this in mind when deciding whether or not they want to accept offers with contingencies attached.

On the other hand, accepting contingent offers can also be beneficial for both buyers and sellers alike if structured properly and negotiated well. For instance, by including financing contingency terms in an offer package, buyers can protect themselves if they are unable to obtain adequate mortgage financing due to market fluctuations or personal financial issues out of their control. Additionally, if structured correctly with ample time frames included for each contingency deadline, this can give buyers peace of mind while giving sellers assurance that every effort will be made by potential purchasers should they be serious about buying their home.

Furthermore, some sellers may prefer offers with contingencies attached because it enables them to remain in control over when and how quickly their home needs to sell. This allows them more flexibility when dealing with multiple potential buyers since there may be more than one party interested in purchasing their property at any given time; thus allowing them more wiggle room with respect to terms and deadlines ultimately resulting in better overall deals for everybody involved.

In conclusion, contingent offers on a house come with both risks and rewards depending upon each individual’s unique situation—which means different transactions carry different levels of risk depending upon how each party has negotiated and structured their deal accordingly. Therefore careful consideration should always be taken whenever entering into this type of agreement, but with proper evaluation and preparation beforehand it can result in a successful transaction beneficial for both parties involved regardless of results down the line!

Risks of Contingencies

Unfortunately, a contingent offer doesn’t guarantee a sale. There are risks associated with contingent offers and it’s important to understand them before entering into such an agreement as a seller. Here is a list of  the most common risks to consider:

1. Potential Loss of Earnest Money: One risk associated with a contingent sale is losing your earnest money if the contract fails to close due to an unsatisfied contingency.

2. Risk of Lower Offer Price: When you accept an offer that relies on contingencies, it may be at a lower price than what you were offered or expected in order to make up for the risk involved in not closing the deal right away.

3. Delayed Closing Dates: If there are multiple parties involved or multiple contingencies included in your deal, this could lead to delays and potentially even cancellations as things fall through the cracks during negotiations.

4. Difficulty Selling During Contingency Periods: Since most buyers are looking for a quick, easy transaction with no complications, they will likely prefer properties without any contingencies attached unless they’re presented with a really good reason why one should be accepted (such as accepting an offer from someone who needs time to sell their current home).

5. Chance of Contract Cancellation: It’s possible that despite efforts made by both buyer and seller, all parties fail to satisfy their respective conditions and then proceed with canceling the contract altogether — leaving you back where you started before making the offer.

6. Risk of Additional Negotiations: Even if the buyer and seller meet their respective conditions in a timely manner, unforeseen issues may arise during negotiations that could require additional time and effort to close the deal.

7. Unforeseen Costs or Fees: Depending on the type of contingency involved, you may be responsible for unexpected costs or fees that weren’t included in your initial agreement — resulting in lower net proceeds from the sale than what was originally anticipated. Costs to keep in mind include realtor commissions, property taxes, and closing costs for sellers.

8. Potential Liability: In some cases, if a contingency isn’t met by either party then there may be legal ramifications involved with breaking the contract; for instance, buyers who fail to obtain financing within their specified timeline would be liable for damages or additional fees incurred by the seller.

9. Difficulty When Selling Multiple Properties: If you’re selling multiple properties at once, it can be harder to find a buyer who agrees to all of your contingencies; and if they do accept them, it could lead to longer negotiations and processing times.

10. Decrease in Property Value: Depending on market conditions, there is always the potential for a decrease in your property value during the contingency period which could then affect the final sale price of your home.

>> Documents needed when selling a house

This list isn’t exhaustive — but it does provide an overview of some of the risks associated with accepting contingent offers as well as potential strategies for mitigating those risks. As a general rule, it’s important to weigh the benefits of accepting an offer with contingencies against any possible drawbacks before making a decision. In some cases, it may be worth taking the risk — but in other cases, it could be better to wait for a more straightforward deal. Ultimately, the choice is yours!

Common Types of Contingencies

A contingency is a clause in an agreement that allows either party to back out of the deal if certain conditions are not met. Understanding these contingencies and how they could impact your home sale is critical for any seller, so let’s take a look at some of the more common types you may encounter.

A house inspector goes through a home inspection checklist in Knoxville, TN.

Home Inspection Contingency  

Home inspection contingency is an important part of the home selling process and is often included in most real estate contracts. This type of contingency allows the buyer to have a thorough inspection of the property before they are committed to buying it. It allows for the buyer to back out of the contract if there are significant issues that have not been previously disclosed or if any other problems arise during the inspection process.

The home inspection contingency is important in protecting buyers from investing in a house that has hidden structural damage, faulty appliances, or major defects that were not previously disclosed. It also allows the buyer to negotiate repairs with the seller before they are committed to purchasing the house.

For sellers, it is important to be aware of home inspection contingencies and make sure that potential buyers understand what they’re getting themselves into as far as any issues with the property. It may be difficult to negotiate repairs if there are any major problems revealed during the inspection process. Sellers should also disclose all known defects and be willing to make any necessary repairs before putting their home on the market.

In some cases, sellers may opt for a pre-listing inspection prior to placing the home on the market. A pre-listing inspection is an inspection of the property performed by a licensed inspector before any offers are made on the home. This type of inspection can help sellers identify any issues with the house so that they can address them and avoid surprises during the home inspection contingency process.

Sellers should also be aware of what’s covered in the home inspection contingency. Most often, a basic home inspection will include an examination of the structure and systems of the property, such as plumbing, electrical, and HVAC. The inspector may also look for signs of water damage or any other structural issues that could be present in the house. Depending on what is negotiated between the seller and buyer, additional inspections such as radon or lead paint may be included in the home inspection contingency.

While a home inspection contingency can help protect buyers from purchasing a house with major defects, it’s important for sellers to understand the process and make sure that all issues are disclosed before listing the home.

Home Appraisal Contingency

Home appraisal contingencies are a key part of most real estate contracts. When a potential buyer makes an offer on a house, the buyer often includes an appraisal contingency in the contract. This means that the sale is contingent upon the property appraising for at least the amount offered by the buyer. This protects buyers from overpaying for a home, as well as sellers from pricing their homes too low.

In general, lenders require an appraisal of the home to make sure that they are not lending more than what the house is worth. This helps protect them from losses if the buyer stops making payments or defaults on the loan. If a potential buyer includes an appraisal contingency in the contract and the home does not appraise for the amount offered, then the buyer has the option to cancel the contract and no longer move forward with the purchase.

For sellers, this means that it is important to accurately price your home in line with current market conditions so you don’t miss out on a sale because the house didn’t appraise for the agreed-upon amount. If you price your home too high, it is likely that the appraisal contingency will not be met and the contract will be canceled.

Mortgage Contingency

Mortgage contingencies are often used in home sale agreements, and when included, they provide sellers with certain protections against buyers who may be unable to secure financing for their purchase. A mortgage contingency allows a buyer to back out of the purchase if they are unable to secure a loan within a specified period of time. The seller is then given the option to keep their earnest money deposit or refund it to the buyer.

When a mortgage contingency is included in an offer, sellers need to understand that there are potential risks involved. For example, if buyers have a difficult time obtaining financing during the specified period of time and need extra time for approval, this could delay the closing date of the sale and cause complications for the seller. Additionally, if buyers find a better loan program during the specified time frame, they may decide to back out of their agreement in order to take advantage of that option.

It is important for sellers to consider all potential risks when entering into an agreement with mortgage contingencies. While mortgage contingencies can provide some protections for the seller, there are no guarantees that buyers will successfully obtain a mortgage. With this in mind, sellers should take extra precautions when entering into an agreement with a buyer who has included mortgage contingencies.

Home Sale Contingency

Home Sale Contingency is a term used in real estate contracts to describe a situation in which the buyer of a home agrees to purchase the property once their own home sells.  This type of agreement is often used when the buyer needs to sell their current home in order to purchase a new one. It is also sometimes referred to as a ‘sale-of-home’ clause or an ‘accession contingency’.

When using this type of agreement, it can be beneficial for both parties if done correctly since it eliminates some of the risks associated with selling and buying a home at the same time. For example, if the buyer is unable to sell their current home, they won’t be obligated to purchase the new one. Likewise, if the buyer purchases a new home before selling their existing one, then they will have to come up with additional funds in order to buy the new home.

When it comes to a Home Sale Contingency, there are certain factors that must be taken into consideration before signing an agreement. The most important aspect is making sure both parties understand the terms of the agreement and agree to them in writing.

Title Contingency

A title contingency is an important part of a home sale transaction and one that can have significant implications for both buyers and sellers alike. Essentially, it’s a clause in the purchase agreement that gives the buyer the right to terminate the contract if certain criteria are not met. Generally, this criterion is related to title issues, like a lien being placed on the property or another obstacle that may prevent the buyer from obtaining a clear title upon closing. It’s important for home sellers to understand what a title contingency entails and how it can affect their sales.

First and foremost, it’s important to note that a title contingency is designed to protect the buyer in case of a title issue. The contingency gives them the right to back out of the contract if they are unable to receive the clear title on the property after closing. This means that even if everything else goes according to plan, the sale may still fail due to a title issue. For this reason, it’s important for home sellers to understand the potential risks associated with a title contingency and ensure that they are covered in the purchase agreement.

When it comes to understanding what a title contingency entails, there are several key points that both buyers and sellers should be aware of. First, it is important to note that buyers will typically require a title search as part of the purchase agreement. This ensures that any liens or other issues with the title are uncovered before closing. If a lien is found, then the buyer has the right to back out of the contract based on the title contingency clause. Additionally, depending on state laws, buyers may also be able to back out of the contract due to other issues related to title, such as a boundary dispute or problems with an easement.

It is also important for home sellers to understand that they may be liable for any financial losses incurred by the buyer due to a title issue. For instance, if a lien is discovered after closing and the buyer is forced to back out of the contract, then the seller may be responsible for covering any legal fees associated with resolving the lien or other costs. Furthermore, if a title issue was not revealed in the title search due to negligence or deception on the part of the seller, they may also face other liabilities such as misrepresentation claims.

Do Contingent Offers Fall Through?

Yes, contingent offers can fall through despite being a common way for home sellers to increase their chances of selling their property quickly. The primary risk associated with this type of offer is that the buyer’s current home may not sell and they may be unable to fulfill the terms of the contract, which could leave the seller in limbo. Additionally, due to financing contingencies or inspection issues, buyers may become unwilling or unable to complete the purchase after making an offer on a property. Furthermore, if market conditions shift during the escrow period sellers may have difficulties finding another buyer willing to keep up with rising prices while also meeting other contingencies. To minimize these risks, it is important for both parties involved in a contingent sale agreement to take steps beforehand such as setting timelines and expectations clearly in writing before entering into an agreement. Additionally, it is also advisable for sellers doing a contingent sale agreement to obtain pre-approval from potential buyers prior to setting any agreements into motion. This ensures that all parties are aware of what needs to be done before making an offer and thus reduces potential risks of delays or disappointment further down the line when negotiating a contingency sale agreement. 

Another way to safeguard yourself from a contingent offer falling through is to sell to one of the cash home buyers in Nashville, Knoxville, or Chattanooga. Cash sales are an attractive option for those who are looking to sell a house fast in Knoxville or for top dollar. Cash sales are typically much faster than contingent sales and do not have the same risks of falling through due to financing issues or other contingencies. Furthermore, cash buyers can often purchase a home in as-is condition which can help sellers avoid costly repairs and renovations before listing their property.


In conclusion, selling to a we buy houses in Tennessee investor without contingencies can be beneficial for home sellers. It provides them with the opportunity to get their house sold quickly and easily while eliminating any potential risks that may arise from working with real estate agents or buyers who include contingencies in their offers. Additionally, it allows sellers to receive cash payment directly from the buyer and ensures they won’t have to cover any closing costs out-of-pocket. Ultimately, when considering all of these factors together, selling your property without contingencies is often the fastest and most efficient way to get your house off of your hands quickly.

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