How a Home Sale Contingency Works

The home sale contingency is a clause in the purchase contract stating: "Buyer's obligation to purchase is contingent on the sale and closing of Buyer's current home at [address] by [date]." If the buyer's current home sells by the specified date, the contingency is removed and the transaction proceeds. If the buyer's home does not sell by that date, the buyer can cancel the contract and typically recover their earnest money. The contingency date: this is a specific date in the contract, typically 30–60 days from contract signing. The timeline must be realistic — a buyer who needs 60 days to sell their home should not agree to a 30-day contingency. Two types of home sale contingencies: • Active listing required: buyer's home must already be listed for sale at the time of offer • Listing not required: buyer commits to listing within a specified number of days of contract signing Sellers prefer the active listing version because it provides more certainty about the buyer's seriousness and timeline.

The Kick-Out Clause: What It Means for Buyers

Most sellers who accept a home sale contingency include a kick-out clause (also called an escape clause or 72-hour clause). This gives the seller the right to continue marketing the property and, if another acceptable offer is received, to give the contingent buyer a defined period — typically 24–72 hours — to either: • Remove the home sale contingency (waive the protection and proceed unconditionally), or • Release the seller from the contract and recover earnest money What this means practically: a buyer with a home sale contingency is always in a somewhat uncertain position. If their current home hasn't sold and the seller receives another offer, they have 24–72 hours to decide whether to proceed at risk or walk away. They must have a plan in advance for what they will do in that scenario. Removing the contingency means the buyer is committing to purchase regardless of whether their current home sells by the stated date — they are accepting the financial risk of potentially owning both properties.

When Sellers Accept and Reject Contingency Offers

Sellers are more likely to accept a home sale contingency when: • The property has been on the market 30+ days with limited other interest • The buyer's home is already listed and priced competitively • The buyer's home is in a market with quick sales • The market is buyer-friendly (sellers have fewer alternatives) • The buyer offers other attractive terms (price, closing timeline) Sellers are likely to reject a home sale contingency when: • The property is receiving multiple offers • The market is competitive and other non-contingent buyers exist • The buyer's home is not yet listed for sale • The buyer's current market is slow and the sale timeline is uncertain • The seller has an urgent timeline that doesn't accommodate the uncertainty In many competitive markets (2020–2023 Florida, coastal California, parts of Texas), contingency offers were effectively non-starters. As markets have normalized in 2024–2025, contingencies have become more accepted again in many areas.

“The home sale contingency is a legitimate, valuable tool when the market conditions support it. I advise clients to include a contingency when we can reasonably expect the seller to consider it — typically when the property has been sitting for a while or in a balanced market. When I know a property is going to have multiple offers, I have the conversation about whether the contingency will cost us the property before we write the offer, not after.”

— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®

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