What to Know About Buying a Home That’s Not Contingent on the Sale of Your Current Home

Buying a home involves a lot of moving parts, especially if you are putting in offers that involve a home sale contingency. However, if your ability to purchase a property is not contingent on another transaction, the entire process becomes a bit simpler. 

There are a few different scenarios where your purchase is not contingent on selling another property. Exploring them can help you decide what the best path forward is for you and your family.

What’s a Home Sale Contingency?

A home sale contingency is a clause in a real estate contract that states the buyer must sell their home for the transaction to proceed. Typically, the purchase offer will specify a date, and the buyer must sell their existing home by that date. If the house doesn’t sell in time, the other party can terminate the contract.

There are two common types of home sale contingencies. The first is a “sale and settlement” clause. Buyers will use this clause if their other home isn’t under contract yet. If their house has already gone under contract, they will use a “settlement” clause, as all they have to do is settle or complete the transaction. 

Either way, the buyer has to sell their current home by the date specified on the purchase offer for the second property. These provisions protect the seller from drawn-out waiting periods, which can be common in slower markets.

In March 2024, homes spent 50 days on the market on average, but just two months prior, properties were taking roughly 20 days longer to sell. This variable is something you must be mindful of when deciding whether to include a contingency clause in your offer.  

Buying a Home Without a Contingency

There are two scenarios where your offer is not contingent on the sale of another property. Scenario one occurs when you don’t currently own a home. The other scenario occurs when you intend to keep your first property. 

Purchasing a second home can be a great option if you want to use one property for rental income or as a vacation destination. However, it can be difficult to balance income restrictions and lending complexities. Therefore, it’s important to speak with a reputable lender before starting your home search. 

Benefits of Buying a Home That’s Not Contingent on Another Transaction

The biggest benefit of buying a home that is not contingent on selling another property is that your offer may be more appealing to the other party. Think about it this way. 

If a seller receives two offers that are similar in terms of the purchase price and overall concessions, they will receive the same amount of net funds regardless of which offer they accept.

However, one party has included a sale and settlement clause, which means they have to push the closing date on the offer to 60 days. Your offer has no such clause. Your offer is more appealing for two reasons. One, you can close on the property sooner, and more importantly, there’s a lower chance that the deal will fall through due to the lack of a home sale contingency. 

Additionally, buying a home without a sale contingency gives you more flexibility to negotiate other terms. If you can close fast and you’ve already secured funding or strong lender approval, the seller may be more willing to offer concessions like money toward closing costs or repairs. 

Ready to Make Your Move?

Making an offer on a home without a contingency gives you a great opportunity to stand out in the current market. Many people need to sell an existing property first, which limits their flexibility and pushes back closing timetables. By avoiding these hurdles, you can submit a strong offer.

If you are ready to jump into the home-buying market, make sure to align yourself with reputable professionals, including a great real estate agent and client-focused lender. The right partners can facilitate a smooth and stress-free transaction.