So you found a house that you really love but your house hasn’t sold yet…what can you do? Consider writing an offer subject to you selling your home. The benefit of this would be that the seller would be locked into an agreed price. Let’s take a look at an important clause you will see in this amendment to a residential sales contract from the Peoria Association of Realtors.

In the event that the buyer does not enter into a fully executed contract that complies with this amendment on or before the contingency date, then this contract shall terminate and the earnest money shall be refunded unless buyer agrees to waive this subject contingency in writing on or before the contingency date, or buyer and seller mutually agree, in writing, to extend the contingency date. This clause is directly pulled from this amendment from the Peoria Area Association of Realtor’s form.  Let me break it down. Entering into a fully executed contract would mean that the buyers home had an accepted offer and that it will close. A contingent offer would be a conditional offer that stipulates one or more requirements to be satisfied before the purchaser is obligated to buy. The contingency date is the date that the sellers give the buyers to sell their home. This date typically runs between 30 and 60 days. You will receive back the ernest money if this amendment expires. The seller may also still show their home during this time. If they receive another offer, not subject to sale, you will have a 24 – 48 hour time period to drop the contingency and buy their home without selling yours. When this amendment is set to expire the buyer and seller may choose to extend the time allowed.

What a mouth full, right?! This frequently used amendment assures that you won’t be left homeless. Go ahead and write an offer subject to the sale of your home and feel secure that you will not have to move out until you have found a new home that you and your family are happy with. Most people don’t have an endless flow of money to be buying a home without selling their current home first. If you find the home of your dreams, but you must sell your home first to make the move, fill out the subject to sale contingency amendment along with your offer. You will be given four decisions on the contract. Buyer’s residence is: currently listed for sale, will be listed in MLS within three days, will be listed with a realtor but not in MLS within three days, or will not be listed with a realtor. When you list your home, you should also list it subject to you closing on the home or your choice. The first two choices will obviously better your chances of getting an accepted offer and of selling your home quickly.
There are also draw backs to putting in an offer like this. Some sellers may not accept an offer subject to the sale of your home because it could scare off other buyers from writing offers. They also may not want to wait for you to sell your home. Also, if you were competing with another offer that did not contain a contingency the sellers would likely accept the other offer and you could loose the home. Obviously the best circumstance would be to have your house sold before putting an offer in on another home to present a more competitive offer but it doesn’t always work out that way. Good luck and happy house hunting!