If the sale of your home is contingent on you finding a new place to live, buyers may be dissuaded from making a bid. However, this clause doesn’t have to be a hindrance. Here’s how to best include this type of contingency in a purchase agreement.
Make it clear
Ensure that the contingency clause is as clear as possible. One of the main concerns buyers have with regards to these clauses is that they’re vague. Understanding the specific circumstances in which a seller may back out is likely to reassure buyers, as they’ll know what they’re signing up for.
Specify time frames
Provide a clear time frame within which you’ll find your new home. Then, determine how this contingency relates to other contingencies in the contract, such as those buyers generally include for things like home inspections.
Typically, the contingency of the seller finding a new home will take precedence on the buyer’s contingencies. In particular, if the buyer has asked for an appraisal or inspection and has specified a time frame within which to complete these, the countdown on finishing them won’t begin until after the seller has found a new property.
Finally, be clear about the seller’s right to extend the closing date should they fail to find a new home within the time originally specified.