Can I make an offer on a contingent house?
Yes, you can make an offer on a contingent house. Even if a house is listed as contingent, it doesn’t mean that the sale is guaranteed to close. With this in mind, many real estate agents will take the approach that “a house is always for sale until the closing date.”
Sellers who are unsure about their current buyer will sometimes accept backup offers on their contingent home. If their first buyer falls through, you might be able to intercept the ball…so to speak. But just as in football, interceptions take planning, timing, and luck.
For these reasons, it’s important to proceed with measured expectations. Your offer may either be a backup, or it might prompt the seller to actually reconsider their current position, depending on the specifics of your offer and the contingency clauses in the seller’s current offer.
Responses you could receive from your offer
After making an offer on a contingent house, the range of responses from the seller can vary. Here’s what you might hear back:
- No response from the seller: In some cases, the seller may not respond to your offer, especially if they are confident that the current deal will close without issues.
- We got it; we’ll call you (don’t call us): This response means the seller has received your offer and is perhaps keeping it on hold as a backup. They’re not actively considering it yet but will revisit if the current deal falls through.
- We like it; you’re first in line as a backup: A more encouraging response, this means the seller sees merit in your offer. If the initial deal doesn’t close, they’re considering moving forward with your offer next.
- We’ll accept your offer: On rare occasions if the contingencies in the current offer allow for it and the seller prefers your terms, they might accept your offer outright. This could happen if the current deal is shaky or if your offer is significantly better.
Each response has different implications for your home-buying journey, and understanding them can help you navigate the process more effectively. Always consult with your real estate agent to craft a strategic offer and to interpret responses from sellers accurately.
Pros and cons of making an offer on a contingent home
Pros
- Opportunity to secure a desired property: Even if a house is under a contingent offer, situations can change. Your offer could become the primary one if the initial deal falls through, allowing you to purchase a home that perfectly fits your needs.
- Less competition: Because many buyers might overlook contingent listings, submitting an offer on such a property might mean you’re facing less competition, potentially giving you a leverage point.
- Negotiation leverage: If the seller is concerned about their current deal falling through, they might be more open to negotiating terms with backup offers, giving you potential leverage in terms of price or conditions.
Cons
- Uncertainty and potential for disappointment: The biggest drawback is the uncertainty. The original deal may go through, leading to disappointment and a potential waste of time and emotional investment.
- Complexity and delay: Making an offer on a contingent home can involve more complex negotiations and a longer waiting period, as you’re essentially in a holding pattern until the initial contingencies are resolved.
- Possible cost implications: Depending on your agreement and the length of time before the contingent offer is resolved, there might be costs associated with extending mortgage rate locks or incurring costs for additional inspections or legal consultations.
