Why Would a Seller Not Accept My Contingency Offer?

What Is a Contingency Offer?

A contingency offer includes conditions that must be met before the sale of a home can proceed and/or close. Because these stipulations usually cater to buyers, a contingency offer may introduce uncertainty or risk for the seller. It’s important for both the buyer and seller to carefully consider the terms of any contingency offer. Both parties should work together to reach an agreement that satisfies both sides.

Types of Contingency Offers

Contingencies are typically meant to protect the buyer’s interests and ensure that they are comfortable moving forward with the home’s purchase. Common contingency offers include:

• Financial Contingency: The sale is contingent upon the buyer obtaining a mortgage or financing to purchase the property.?
• Home Inspection Contingency: If the home inspection reveals significant issues, the buyer may have the option to request repairs, renegotiate price, or withdraw entirely.
• Appraisal Contingency: If the property doesn’t appraise at or above a certain value, the buyer may have the option to renegotiate the price.
• Sale of the Buyer’s Home: If a buyer needs to sell their current home in order to purchase a new one, they may make the new home’s purchase contingent on the sale of their current one.

Why Do Sellers Not Like Contingency Offers?

Oftentimes, sellers prefer not to accept contingency offers due to uncertainties in the sale process. Since contingency offers are conditional upon several factors, such as financing and inspections, they can delay or jeopardize the home’s sale. Sellers can worry that these stipulations could lead to a prolonged sale timeline or the sale not following through if conditions are not met. In the current competitive real estate market where multiple offers are common, sellers may opt for offers without contingencies as they tend to be less risky. While contingency offers usually provide protection for buyers, sellers can also benefit from contingency offers, including this common one:

• Home Sale Contingency: If a seller needs to find a new home before selling their current one, they can include a stipulation that their sale is contingent on securing a new home.

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