What is a home sale contingency, and should a Virginia seller accept one?

A home sale contingency is a term in a purchase contract that says the buyer’s purchase depends on selling their own home. If that sale doesn’t happen on time, the buyer may have the right to walk away under the contract’s terms.

For a seller, the question is simple: how much uncertainty are you willing to carry, and what are you paid for carrying it?

How does a home sale contingency work?

The buyer makes an offer and adds the contingency. They then need to list or close on their existing home within a stated period.

Until that happens, your sale depends on theirs. If their home sits unsold, the contract may expire or the buyer may cancel. Their buyer’s own financing or inspection could also fall through, which affects them and then you.

That’s the main difference from the contingencies sellers see most often. An inspection contingency depends on the home you’re selling. A financing contingency depends on the buyer’s lender. A home sale contingency depends on a separate transaction you have no say in. (For the others, see how an inspection contingency works.)

What does it cost a seller?

Mostly time and certainty. A contingent offer can leave your home effectively off the market while you wait. If it falls through, you may be back at the start with a longer listing history.

Whether that matters depends on your situation and on how your home is selling. If you have showings and other interest, a contingent offer competes with cleaner ones. If it has been on the market a while, a contingent offer may be the best available.

The price tells only part of the story. A higher contingent offer can be worth less than a lower one with no strings attached. I wouldn’t compare them on price alone.

When might accepting one make sense?

This is interpretation, not legal or financial advice.

It may make sense when you have no deadline of your own, the buyer’s home is already listed at a price that looks reasonable for its condition, and the offer is otherwise strong. It makes less sense when you’re also buying and need to close on a date certain. If you’re doing both, our guide to buying before you sell covers the other side of the same problem.

Questions worth asking your agent: Is the buyer’s home listed, and how has it been showing? How long is the contingency window? Can we keep showing our home? Can we accept another offer, and what notice does the first buyer get?

What protections can a seller ask for?

Contracts can be written to give a seller more footing. Sellers sometimes ask for a short deadline to get the buyer’s home under contract, a right to keep marketing, or a clause that lets them accept a better offer if the first buyer can’t remove the contingency within a set time after notice.

Whether and how those terms work depends on the exact language, which is why I’d have your agent and, for anything you’re unsure about, a Virginia real estate attorney read it before you sign.

What should I do next?

If you’ve received a contingent offer, or want to know how one would look against others in your area, talk to us before you respond. Our Lynchburg office serves Forest, Lynchburg and surrounding areas, and Daniel Keeton can walk you through the offer.

This article is general information, not legal or tax advice. For questions about a specific contract, talk to a Virginia real estate attorney or a lender.