Home Selling vs Home Settlement Contingency

Did you receive an offer with a Home Selling Contingency? Or, was it a Home Settlement Contingency? Do you know what the difference is? Let's chat about it before you decide which offer to go with.

Do you know the difference between a home selling and a home settlement contingency? Well, they sound very similar. But, there's actually a huge difference.

A home selling contingency, is, when you say, you're going to go buy another home, and you say, hey, Mr. and Mrs. Seller, I want to buy your home, but I need to find a buyer for my own home first. I'm not under contract. Maybe I already have it listed, but more importantly, I can't buy your house, I can't perform until my house closes, and I can't close until I actually go into contract. That's a home selling contingency, nobody likes it. A lot more risky to the seller. They don't want to take their home off the market, typically, in order for you to potentially go find a buyer.

A home settlement contingency, simply is, you're already under contract, for your home, awesome. And you're like, hey, Mr. and Mrs. Seller, I need to close on my house, but I already have a buyer, we're under contract, things are looking great. That's a home settlement contingency, because you need the funds out of there, right? Or, at least for your debt to income ratio.

Now, there are ways it can be a little bit stronger, for example, if you've already gone through the home inspection, you've already gone through the appraisal, stuff like that. If you're thinking, well of course, why wouldn't they take that, well, it still is more risky, right? Because, maybe, your deal blows up, maybe the appraisal comes in low, maybe the home inspection could be a little dicey. Or, maybe the other buyer, just, you know, maybe they lose their job or something, and, they can't afford the place, they don't get approved. So, it still is more risky, but, way less risky than a home selling contingency.

A lot of sellers, will entertain a home settlement contingency, where a home selling contingency isn't tolerated. So, I hope that makes good sense. Like this video, give me a thumbs up, if you have any questions on anything here, just leave it in the comments below, I'll get back to you, I'm Brendan Spear with Caprika Realty. Thanks for watching. Have a great day.

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