The Minneapolis Star Tribune recently ran an article (The contingency conundrum) about buyers who get into the trap of bidding on a home before they have sold their own home. One tactic is to place a contingency on your bid that relies on you selling your home before you buy a new home.
The contingency route I snot a perfect world. There are pros and cons for the buyer and seller.
From a buyer’s perspective a contingent offer can be better than no offer at all. It does get you in line to buy a home while eliminating the risk of paying 2 mortgages. For many people the stress of placing a non-contingent offer and running the risk of owning 2 homes is more stress than they want to experience. A contingency offer can also be the motivator a buyer needs to market their current home.
The downside of a contingency offer is that a seller won’t always accept it. Also you often need to bid full price or provide increased earnest money to sweeten your contingency offer.
Want to learn more about contingencies? Contact the Buyers Real Estate Group.