Most people who are considering upgrading to a newer home, or are relocating because of job or military transfer, begin their home search before they have sold their existing home. What do you do if you have found the perfect new home but still need to sell your existing home first? Consider making a contingent offer.
What is a Contingent Offer?
A contingency means that the buyer makes an offer, and the seller accepts the offer, but the final sale is based upon certain criteria such as the sale of an existing home. Most importantly, a contingent offer means you may not miss out on buying the home, especially in this environment of low-interest rates, while you take care of selling your house.
New Home Construction
Using a contingent offer will safeguard you in the purchase of a new home that has not been built. Possibly, the builder may wait until the contingency has been satisfied prior to beginning construction. However, if the builder begins construction ahead of the contingency is met, the builder assumes all the risks if the sale should fall through. Either way, you will have secured your neighborhood lot choice and do not have to worry about waiting to start the process until after you sell your home.
If the builder accepts your contingent offer on a move-in-ready new home, you may be in a “First Right of Refusal” position. In this case, if another buyer makes an offer on the same home for which you have made a contingent offer, you may have only 24-to-48 hours to lift the contingency or lose the house to the other buyer.
New Home Financing
Some builders make securing favorable financing easier through our preferred lenders, and when you use one of them, they may pay the closing costs on the purchase of your new home. Good New Construction Agents have the experience and expertise to help prospective homebuyers through the entire process. Preferred lenders have knowledge and experience with a wide array of new home financing options, and they will help you find the right mortgage to fit your needs.
Some builders may work with you on a contingent offer to make sure you get the home of your dreams even if you still need to sell your existing home.