Does an offer with multiple contingencies pose a risk?

Selling real property means accepting a degree of uncertainty in your future. You may not know how much the final price will be or when you will eventually need to leave the home. Reviewing buyer offers can be an exciting — and frustrating — process. 

The final sale price is only one consideration when evaluating offers. Prospective buyers may want you to move out more quickly than you anticipated or might include numerous contingencies in their offer. When evaluating multiple offers on a property, whether or not the offer includes multiple contingencies may influence which offer you eventually accept. 

Why do contingencies give some sellers pause? 

Contingencies can leave you back at square one, forced to relist your home and review new offers. All kinds of issues can arise during a real estate transaction that may affect whether it is eventually successful. When the issue falls under a contingency in an offer, you won’t be able to recoup your expenses by keeping the earnest money. 

The buyer might not be able to sell the home where they live now, or they might lose their job and be unable to secure a mortgage. On the other hand, market circumstances could shift, leading to a drop in property valuation and an appraisal gap. The more contingencies a buyer includes in their offer, the more excuses they could have to cancel the closing without compensating you for the delay and frustrations their decisions cause. 

Especially with changing market conditions putting pressure on prices, sellers reviewing multiple offers may want to carefully consider the impact that contingencies could have on their transaction, especially if the closing ends up delayed significantly. Learning more about the nuances of real estate contracts and transactions can help those hoping to sell real property.