BIC TIP #1134: Contingent Sales

There is a paragraph in the Offer to Purchase and Contract where the buyer discloses whether they need to sell another residence in order to buy. Plenty of buyers, and more than a few brokers, read that box and think they have built in a safety net. Stephen Long wants to set the record straight: that paragraph is not a contingency, and it is not a binding term that lets the buyer off the hook.

A Disclosure Is Not an Escape Hatch

That section of the contract is simply a disclosure from the buyer to the seller. It tells the seller that the buyer has another property to sell. It does not make the purchase dependent on that sale happening.

In other words, if the buyer’s current home does not sell, the buyer is still on the hook. The contract does not magically pause or unwind because the other transaction stalled.

The Buyer Still Has to Perform

Stephen emphasizes that the buyer still has to perform on the purchase price and the timelines in the contract. That includes the due diligence period and the closing date. Missing those because the other home has not sold is not protected by that disclosure paragraph.

This is where good buyer counseling matters. Before writing, talk through how the buyer will actually close. Do they need enough time to market and sell their current home? Negotiate a due diligence period and closing date that give them a realistic runway. Do they have other means to purchase without the sale? That works too.

Need a Real Contingency? Call an Attorney.

Sometimes a buyer truly cannot buy unless their current home sells, and they want the contract to say so. In that case, Stephen’s guidance is straightforward: a true sale contingency must be drafted by an attorney.

Brokers should not be writing their own contingency language into the contract. Drafting legal terms is the practice of law, and a homemade contingency can create more problems than it solves. Refer your buyer to a real estate attorney who can draft language that actually does what the buyer needs.

The Practical Takeaway

The paragraph about selling another residence tells the seller something. It does not protect the buyer. Your buyer must still meet the price, the due diligence period, and the closing date. Plan the timeline with that in mind, and if your buyer needs a genuine sale contingency, send them to a real estate attorney to draft it.