Introduction
All real estate transactions carry risks, especially when it comes to home sale contingencies. Either the buyer or seller may decide to back out, potentially leading to financial losses. Here, we’ll cover the main reasons contingent offers fall through and what steps you can take if this happens to you.
A contingent offer means certain conditions must be met before the sale contract is finalized. When a home is in contingent status, the original buyer has a claim on it, blocking other potential buyers unless a “kick-out” clause is included. This safety net gives buyers time for mortgage approval and inspections, but it can also slow down the sale process.
In 2022, about 7% of contingent offers fell through, according to the National Association of Realtors. The most common reasons for contingent offers failing include:
• Failed Financing: Mortgage approval is often denied even after prequalification.
• Failed Inspections: Issues found during inspection can lead buyers to walk away if repairs aren’t made.
• Appraisal Contingencies: The property value doesn’t meet the sale price, leading buyers to reconsider.
• Title Contingencies: Title issues may arise, causing buyers to back out due to ownership concerns.
• Home Sale Contingencies: Buyers may need to sell their current home first, leading to delays.
Since contingent offers have a risk of failure, sellers need to weigh potential delays, financial losses, and other challenges. Sellers can mitigate these risks by demanding higher earnest money deposits, setting clear expectations, and accepting backup offers.
To avoid contingent offers, sellers can demand non-contingent offers or work with cash buyers like We Buy CTX. Cash buyers offer a faster, more secure sale process without financing or appraisal contingencies, buying homes in any condition and completing transactions in a matter of days.
At We Buy CTX, we offer Texas homeowners a reliable alternative to traditional sales. We eliminate contingencies and provide a smooth, no-fee transaction, offering cash at closing. Without financing requirements or lengthy appraisals, we ensure a fast and worry-free sale.
Selling to a cash buyer may be ideal if your home has inspection issues or you need to sell quickly. Cash buyers like We Buy CTX purchase homes in any condition and close sales far faster than traditional methods. For a fair, no-obligation quote, call We Buy CTX at (512) 769-2292.