How To Buy A House Contingent On Selling Yours

Key takeaways:

• Helps manage risk: Avoids carrying two mortgages while you buy a new home.
• Can weaken your offer: Sellers often prefer buyers without contingencies, especially in competitive markets.
• Preparation improves your chances: Listing your home early, pricing it right, and getting pre-approved can make a contingent offer more appealing.

Buying and selling a home at the same time can feel like walking a tightrope, one wrong step and the whole process wobbles. Maybe you’ve found your dream home in Austin, TX, but need to sell your house in Phoenix, AZ first. That’s where a home sale contingency comes in. This clause makes your offer to buy a new home dependent on selling your existing one, giving you financial protection and peace of mind. 

In this guide, we’ll break down exactly how a home sale contingency works, the pros and cons of using one, and practical strategies to make a contingent offer to sell your home as strong as possible.

What is a home sale contingency?

Definition: A home sale contingency is a clause in your purchase contract that makes buying a new house dependent on selling your current one. The purchase only moves forward if your existing home sells.

Why buyers use it: Many buyers add this clause to avoid carrying two mortgages at once. It also lets you tap the home equity from your current property to use as a down payment on the new home.

Typical timeframe: Most home sale contingencies last about 30–60 days. This window gives you time to list your property, find a buyer, and close. If your home doesn’t sell in time, the contract usually ends and in most cases you can walk away without losing your earnest money.

Kick-out clauses: Sellers sometimes include a “kick-out clause.” This lets them keep marketing the property and accept another offer if your home doesn’t sell by the deadline. It’s designed to protect the seller from being stuck waiting, but terms vary by contract and local laws. 

How does buying a house with a home sale contingency work?

Step 1: List your current home

The process usually starts with putting your existing home on the market. Having it listed, and ideally priced competitively, shows sellers that you’re serious about selling and increases the chance they’ll accept your contingent offer.

Step 2: Add the contingency clause to your offer

When you make an offer on a new home, your agent includes a home sale contingency in the purchase contract. This clause spells out that your ability to buy depends on successfully selling your current property.

Step 3: Seller accepts, sometimes with a kick-out clause

If the seller agrees, the home goes under contract with your contingency in place. To protect themselves, many sellers also include a “kick-out clause,” allowing them to continue marketing the property and accept another offer if your home doesn’t sell quickly enough.

Step 4: If your home sells, the contract moves forward

Once your home goes under contract and closes within the agreed timeframe, your purchase on the new home moves ahead to the next steps, like inspection, appraisal, and final loan approval.

Step 5: If your home doesn’t sell in time, the contract ends

If your property doesn’t sell within the contingency window (usually 30–60 days) the contract is typically terminated. In most cases you can walk away without losing your earnest money, but the seller is free to move on with another buyer.

Tips for making your home sale contingency offer stronger

• Get pre-approved for your next mortgage: A pre-approval letter shows sellers you’re financially prepared, even though your offer is contingent on selling another home.
  
• Price your current home realistically: Setting the right listing price helps your home sell faster, which reassures sellers that your contingency won’t cause long delays.
  
• List your current home before making an offer: Having your property already on the market or better yet, under contract, makes your offer look more credible.
  
• Shorten the contingency period if possible: A 30-day window instead of 60 can make a big difference in how attractive your offer appears.
  
• Offer more earnest money or a higher price: Adding financial incentives shows sellers you’re serious about closing once your home sells.
  
• Be transparent with sellers: Let them know where you are in the process and provide updates. Sharing that your home is already listed or in contract builds trust and increases your chances of acceptance.

Pros of buying a house contingent on selling yours

• Financial security: A home sale contingency protects you from carrying two mortgages at the same time. You won’t be forced to pay for your new house while still waiting for your current one to sell.
• Easier transition: Selling first and buying afterward means you can move directly from your old home to your new one without juggling two properties.
• Avoid rushed decisions: This contingency gives you time to sell your home at a fair price rather than rushing into a quick sale or settling for less.

Cons of buying a house contingent on selling yours

• Weaker offer in competitive markets: Sellers often prefer offers without contingencies, so your bid may be less attractive if multiple buyers are interested.
• Potential delays or lost opportunities: If your home doesn’t sell quickly enough, the seller may move on to a non-contingent buyer, and you could lose the property you wanted.
• Added stress of two transactions: Coordinating the timing of selling and buying at once can be complicated, requiring careful scheduling and constant communication with both parties.

Alternatives if you can’t use a home sale contingency

• Bridge loan: A short-term loan that lets you buy your new home before your current one sells. It provides temporary financing but usually comes with higher interest rates. Discuss the costs and terms with a lender, as these loans often have higher interest rates.
• HELOC (home equity line of credit): Borrow against the equity in your current home to fund the down payment on your next property. This adds debt until your home sells, so review the terms carefully with a financial advisor or lender.
  
• Rent-back agreement: Sell your house but negotiate with the buyer to stay in it for a set period while you close on your new home. It reduces pressure but requires buyer approval.
  
• Sell first, rent short-term: Avoids a contingency altogether, but it often means moving twice and covering storage or rental costs in between.
  
• Trade-in or Buy Before You Sell programs: Some companies and lenders offer services that unlock your home equity upfront or make a cash offer on your behalf, allowing you to buy first and sell after.

The bottom line: Buying with a contingency is all about balance

 A home sale contingency offers a safety net by preventing two mortgages and easing the transition, but it can weaken your offer in a hot market. By pricing your home competitively, getting pre-approved, and being upfront with sellers, you can strengthen your position. The key is knowing your options and working with your agent to protect your finances while securing your next home.

Buying a house with contingency to sell yours FAQs

1. Can I buy a house contingent on selling mine?

Yes. Many buyers use a home sale contingency, but in competitive markets sellers often prefer non-contingent offers because they close faster and carry less risk.

2. How long does a home sale contingency last?

Most contingency periods run 30–60 days, though the exact timeline is negotiable between buyer and seller.

3. What happens if my house doesn’t sell in time?

If your property doesn’t sell before the contingency deadline, the purchase contract usually ends. In most cases, you’ll get your earnest money deposit back, but check your contract and local laws.

4. What is a kick-out clause?

A kick-out clause allows the seller to keep showing their home and accept another offer while your contingency is in place. If another buyer comes forward, you’ll typically have 72 hours (sometimes longer) to remove your contingency or step aside.

5. Is a home sale contingency common?

Yes, especially in balanced or buyer-friendly markets where sellers may be more open to accepting them. In hot seller’s markets, they’re less common since non-contingent buyers have the advantage.

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