How to Bid on a House With an Offer Contingent Upon Sale

Bidding with a contingent offer beats living in a temporary rental unit.
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Your credit rating may be perfect, and the bank may have pre-approved you for a loan. However, that's not going to mean much if you don't have the cash for a down payment. Making an offer contingent upon the sale of your home may help you out of this bind. While such offers were almost unknown during the housing boom, they've become common again as the housing market has cooled off.

Contingency Defined

Homes are often sold subject to particular contingencies. A contingency is a condition that must be satisfied before a party’s duty to perform his side of the contract arises. Often, a buyer will make an offer to purchase a house contingent upon the sale of his property. This means that the buyer does not have to purchase the property until he has sold his own property first.

Making the Offer

If you find a property that you wish to purchase but lack sufficient funds or are afraid of being saddled with paying two mortgages at the same time, you can ask your realtor to make the offer contingent upon the sale of your property. Such offers tend to be more acceptable in slow markets when there are few prospective buyers. The seller may accept your offer if she believes that your home is likely to sell quickly.

Sweetening the Deal

Since contingent offers are less desirable to sellers, you can take steps to make your offer more appealing. For example, your offer might be more attractive to the seller if it is slightly higher than the market price. Another strategy is to allow the seller to void the agreement if you do not sell your home in a short period of time. This give the seller the opportunity to back out of the transaction. Alternatively, you might offer the seller a release clause. A release clause lets the seller keep their property on the market while you try to sell yours.


If the seller does not accept your offer subject to contingency, ask your lender about a bridge loan. A bridge loan is a very short term loan that is paid back upon the sale of your property. Bridge loans are good solutions if the market is so hot that the seller has other offers or if your home has been on the market so long that the seller believes that your home will not sell in a reasonable period of time.

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