To be, or not to be – Contingent on selling your home before buying your next home
When embarking on the exciting journey of purchasing a new home, it's crucial to grasp some fundamental concepts to make informed decisions. One such concept that can significantly impact your home-buying experience is the difference between being contingent on the sale of a home and non-contingent. Let's break down these terms to help you navigate the real estate landscape with confidence.
Contingent on the Sale of a Home:
A contingent offer is essentially an agreement that hinges on a specific condition being met – in this case, the sale of the buyer's current home. If you find your dream home but must first sell your existing property to finance the purchase, your offer will include a contingency clause. This contingency gives you a set period, usually a few weeks, to sell your current home. If you can't sell within that timeframe, you may have the option to back out of the deal without penalties.
Pros:
1. Allows you to pursue a new home while still living in your current one.
2. Provides a safety net by allowing you to withdraw from the deal if your home doesn't sell.
Cons:
1. May make your offer less appealing to sellers who prefer non-contingent offers.
2. Could lead to delays and uncertainties, as the sale of your current home must happen within the specified timeframe.
Non-Contingent Offer:
On the other hand, a non-contingent offer is straightforward – you're ready to buy without the need to sell your existing home first. This type of offer is often more appealing to sellers because it eliminates uncertainties and potential delays associated with waiting for another property to sell.
Pros:
1. Demonstrates to sellers that you are a serious and committed buyer.
2. Streamlines the buying process, potentially leading to a quicker closing.
Cons:
1. Requires significant financial readiness, as you'll need to manage two mortgages temporarily (unless you take advantage of the cash offer/bridge loan we shared.)
In conclusion, whether you choose a contingent or non-contingent approach depends on your specific situation and priorities. If you can comfortably manage both properties or have a flexible timeline, a non-contingent offer may be the way to go. However, if you need to sell your current home to finance the new one, a contingent offer provides a strategic way to navigate the process.
As always, consulting with a knowledgeable real estate agent can help you weigh the pros and cons based on your unique circumstances, ensuring a smoother and more informed home-buying journey. If you’d like to chat about the financing options available to you including the cash offer/bridge loan, click here.
