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Need to sell a house before buying another? Write a contingency contract


How to use a contingency contract

 contingency contract

In today’s real estate market the inventory is low in certain price segments. One problem sellers are having is if they sell where do they go?  And that’s a good question! Most of us can’t buy a house before a sale takes place.

What do you do?

A common thread runs through each of us on an emotional level. You need a place to go home.

Many sellers are shopping for a home first before putting theirs on the market. I call it being pragmatic and resourceful.

However in a low inventory situation you might not be the winning bid.

How to start

The way to approach a contingency offer is to let all parties know your intent, honestly.

It is better if you already have your home on the market before you make a contingency offer.

The contingency is a separate form submitted with an original offer. It states you must sell your home first before the original offer is valid.

It will cost you a negotiable fee but your earnest money will not be at risk if you follow the timelines in the contract.

These contracts are more complicated but can work out for the greater good.

Active kick out contingency

You must know up front that a contingency offer does not take a home off the market, it changes the status to active kick-out.

I wrote a post back in 2009 about active kick out contingencies and it is still valid if not more so today.

Here’s the link to see how a kick out contingency contract works.

If you have a question about the process contact us for more information on how to write one.

This is a great real estate solution if you’re ready to move and secure your next home.  Although I will say it is a bit more stressful and more risk involved for all parties.

About Terry Smith

Passionate about real estate, positive problem solver, specialty boutique real estate brokerage that does things your way! A full-time Broker & REALTOR®, helping people buy and sell homes in the Dallas - Plano area. Whether you're a buyer just starting out or someone with luxury properties to sell. I have extensive knowledge and experience to help you with your real estate transaction. I am a native Dallasite. Have questions? Ask me. You can find me on Google+ and Pinterest.

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