Real estate contingencies make comeback

Steps sellers can take to maximize chance of sale

During the recession of the early 1980s, when mortgage interest rates hovered near 18 percent, few homebuyers could qualify for financing, particularly if they already owned a home that needed to be sold before buying a replacement home. Offers made contingent on the sale of the buyers’ current home were popular.

Contingent-sale offers are increasing in the current housing recession. Most buyers who want or need to make a move to a home that better suits their current lifestyle can’t qualify to buy before selling their existing home due to stringent mortgage qualifying criteria.

Sellers don’t like offers that are contingent on another property selling because it increases uncertainty. If the buyers don’t price their house right for the market and it doesn’t sell, the sellers are back to square one searching for another buyer.