Important takeouts:
Helps in managing your risk: Avoid carrying two mortgages while purchasing a new home. You can weaken your offer: Sellers often prefer buyers without contingency, especially in competitive markets. Preparation will improve your chances. Listing your home early, priced it correctly, and pre-approved will make your accidental offer even more appealing.
Buying and selling houses at the same time can make you feel like you’re walking the tightrope, one wrong step, the whole process is wobbling. Maybe you found your dream home in Austin, Texas, but you must first sell your home in Phoenix, Arizona. That’s where the emergencies of home sales emerge. This clause provides financial protection and peace of mind by relying on selling an existing home.
In this guide, we will break down exactly how home sales work, the pros and cons of using one, as well as practical strategies, and create a conditional offer to sell the most powerful home possible.
What is a home sales contingency?
Definition: Home Sale Contingency is a clause in a purchase agreement, a clause in a purchase of a new home that relies on selling your current home. Purchases will only move forward if an existing home is for sale.
Why buyers use it: Many buyers add this clause to avoid carrying two mortgages at once. You can also tap Home Equity from your current property to use it as a down payment for new homes.
Typical time frame: Most home sale contingencies last around 30-60 days. This window will list your property, give you time to find and close the buyer. If your home doesn’t sell in time, the contract will normally end and in most cases you can leave without losing serious money.
Kickout Clause: Sellers may include a “kickout Clause.” This allows them to continue selling the property and accept another offer if your home is not sold by the deadline. It is designed to prevent sellers from waiting, but the terminology varies depending on the contract and local law.
How does buying a home in a home sales emergency work?
Step 1: List your current home
This process usually starts with bringing an existing home to the market. List the list and show the seller that ideally at a competitive price, you take the sale seriously and increase the likelihood that they will accept your accidental offer.
Step 2: Add a contingency clause to your offer
When making an offer in a new home, your agent will include the urgency of home sales in your purchase agreement. This clause explains that purchasing ability depends on relying on the current sale of properties.
Step 3: Sellers accept sometimes with kickout clauses
If the seller agrees, the house has a contract with your contingency. To protect yourself, many sellers also include a “kickout clause” and if your home doesn’t sell quickly enough, you can continue marketing your property and accept another offer.
Step 4: If your home sells, the contract moves forward
Once your home has signed a contract and is closed within the agreed time frame, your purchase in the new home will take you to the next step, including inspection, evaluation, and final loan approval.
Step 5: If your home doesn’t sell in time, the contract will end
If the property is not sold within the emergency window (usually 30-60 days), the contract will normally end. In most cases, you can leave without losing serious money, but the seller is free to move with another buyer.
Tips for making home sales more effective
You will be approved in advance for your next mortgage: The pre-approval letter shows the seller you are financially preparing, despite your offer being conditional on selling another home.
Current home prices are realistic: Setting a proper listing price will help your home sell faster.
List your current home before making an offer. Under the contract, you have already put your property on the market, or even better, your offer looks more reliable.
If possible, shorten the duration of an emergency. A 30-day window instead of 60 can make a big difference in how attractive your offer is.
Offer more serious money or higher prices: Adding financial incentives shows you are serious about closing down seriously when your home sells.
Be transparent with the seller: let them know where you are in the process and provide updates. Having your home already listed or sharing a contract will build trust and increase your chances of acceptance.
The advantages of buying a home that is subject to your sales
Financial Security: The emergency situation of home sales protects you from carrying two mortgages at the same time. While you wait for your current home to sell, you will be forced to pay for your new home. Easier Migration: Sold first and then buy it means you can move directly from the old house to the new house without juggling the two properties. Avoid rushing decisions: This contingency gives you time to sell your home at a fair price rather than rushing to a quick sale or settle down cheaply.
The disadvantage of buying a home that is subject to your sales
Weak offers in competitive markets: Sellers often prefer offers without contingency, so if multiple buyers are interested, your bid may not be attractive. Potential delay or lost opportunities: If your home doesn’t sell fast enough, the seller can move to an accidental buyer and could lose the property you want. Added stress for two transactions. Adjusting the timing of sales and purchases at once can be complicated, requiring careful scheduling and constant communication with both parties.
If you can’t use the alternative home sale contingency situation
Bridge Loan: A short-term loan that allows you to purchase a new home before your current home is sold. They provide temporary funding, but usually come with higher interest rates. These loans often have higher interest rates, so discuss costs and terms with the lender. Heloc (Home Equity of Credit): Borrows against the shares of your current home and funds the down payment for your next property. This will add additional debt until your home is sold, so be sure to check the terms carefully with your financial advisor or lender.
Rent Contract: Sell your home, but negotiate with the buyer while you close your new home and stay there for a period of time. It reduces pressure but requires buyer approval.
Sell first and rent for a short period: avoid emergency situations entirely, but often means moving twice and covering storage or rental costs in between.
Trade in or buy before selling the program: Some businesses and lenders offer services to unlock home equity in advance, or create cash offers on your behalf, making them first purchase and sell later.
Bottom line: Everything you buy with contingency is about balance
In a home sale emergency, we offer a safety net by preventing two mortgages and mitigating the transition, but could weaken offers in the hot market. You can strengthen your position by price your home competitively, being pre-approved and presenting in advance with the seller. The key is to know your options and work with your agents to protect your finances while securing your next home.
Buy a home in an emergency to sell FAQs
1. Can I buy a house that is subject to my sale?
yes. While many buyers use contingencies in home sales, in competitive markets, sellers often prefer non-accidental offers as they approach faster and less risk.
2. How long does home sales have an emergency?
Most emergency periods run for 30-60 days, but the exact timeline is negotiable between buyers and sellers.
3. What happens if my house doesn’t sell within the time limit?
If the property cannot be sold before the emergency deadline, the purchase agreement will normally end. Most of the time, you will get back your serious money deposits, but check your contract and local method.
4. What is a kickout clause?
The kick-out clause allows sellers to continue to show their homes and accept other offers while the contingencies are in place. If another buyer comes forward, it usually takes 72 hours (sometimes longer) to remove or put aside the accident.
5. Is home sales unforeseen circumstances common?
Yes, especially in a balanced or buyer-friendly market where sellers may be more open to accepting them. In the hot seller market, they are less common as discontinued buyers have advantages.
