Selling a House With No Contingencies

In a perfect world, selling a house with no contingencies would be the norm. Buyers would come in with rock-solid financing and make an offer knowing that the price of the home reflects its condition and fair market value, and sellers’ homes would be in excellent condition. Instead, contingencies — conditions that must be met before a deal can be finalized — play an important role in protecting both buyers and sellers.

A no-contingency or non-contingent offer means that a buyer’s offer has been accepted by the seller and there are no further contingencies to be met in order for the house to be sold. A contingent offer means that a buyer’s offer has been accepted by the seller but certain requirements must be met in order for the home to be sold. A seller can look at other offers but cannot accept or negotiate another buyer’s offer unless one of the contingencies is not met, canceling the deal.

Buyer contingencies might include “an engineer’s inspection, a chimney inspection, a furnace inspection, a mortgage contingency, and an attorney’s appraisal,” says top-selling real estate agent Mark Siwiec of Rochester, NY, who has forty-two years of real estate experience.

Homeowners hoping to sell a home with no contingencies benefit from a seller’s market, in which demand is high relative to supply. According to HomeLight’s 2022 Top Agents Insights Housing Market Preview report, about 75% of the interviewed agents believe that the housing inventory shortage will continue throughout 2022.

The National Association of Realtors® reports that in May 2022, “26% of buyers waived the inspection contingency” and “24% of buyers waived the appraisal contingency.” Changing economic conditions, including inflation and higher interest rates, can begin to tilt the market back in favor of buyers.

In the right market, or through a non-traditional sale, it’s possible to attract or negotiate a contingency-free offer. Here is a guide on some possible contingencies as well as on how to handle some scenarios in order to help you in selling a house with no or few contingencies.

Types and functions of contingencies

Contingencies exist to protect both the buyer and seller by protecting both parties’ ability to withdraw from the agreement. They can protect the buyer against unknowingly purchasing a home needing significant repair or paying more for the property than it’s worth. Contingencies can also protect a seller from getting stuck in an agreement that drags on and on.

The current seller’s market, characterized by low housing inventory, increasing home prices, an increasing number of people who are working from home, and many buyers who are looking to find ways to cope with rising inflation, may be the catalyst to fewer requested contingencies and may create the perfect storm for selling a house with no contingencies.

Here are common types of contingencies that sellers may encounter:

Inspection contingency

The American Society of Home Inspectors defines a home inspection as “an objective visual examination of the physical structure and systems of a house, from the roof to the foundation.”

An inspection contingency stipulates that the buyer has the right to order a home inspection by a certain deadline and can exit the deal with their earnest money if serious, previously undisclosed issues are disclosed. A buyer can also ask you to fix certain problems, request that the seller offer a repair credit, or renegotiate the purchase price based on the inspection.

Sellers may consider a pre-listing inspection and fix anything that may be off-putting to potential buyers in order to help in selling a house with no contingencies.

Appraisal contingency

Most buyers need a mortgage to purchase a home, and the lender of that mortgage will require an appraisal by a third party before closing to ensure that the buyer’s offer reflects the actual value of the house. The appraisal contingency stipulates that If the appraisal comes in under contract value, then the deal can either be renegotiated or abandoned.

Financing contingency

If a buyer can’t secure the mortgage to buy your house, then they can void the contract without penalty if they include a financing contingency in their offer. Financing issues are frequent causes of delays, with 35% of delays in closing arising from complications with a buyer’s financing.

Home sale contingency

In many cases, a buyer can only qualify to purchase a house when they factor in the equity that they have in their current homes. A buyer in this position would elect to protect their interests with a home sale contingency, which means the sale of your house only goes through when the buyer’s current home sells.

Selling a house with no contingencies

Whether you set out to avoid contingencies from the beginning, or a bidding war makes negotiating a contingency-free contract an option, here are some routes for selling a house with no contingencies:

Attract multiple offers and then ask buyers for their highest and best

If you receive multiple offers on your home, you can ask buyers for their highest and best bids and ones with few or no contingencies. A request that buyers bring their “highest and best” signals that you have options and that a buyer will need to put together their strongest and most compelling offer to win the home. This could mean offering you more money. It could also mean waiving contingencies to lessen your risk as a seller.

“If a buyer’s up against a dozen other offers, everything that they can do to remove an obstacle is just another opportunity to prevail,” shares Siwiec. That could mean buyers will remove contingencies to make the deal better and simpler for the seller in lieu of an above listing price offer.

HomeLight’s 2022 Buyer Seller Insights Report finds that 22% of buyers asked for no repairs from the seller in order to stand out amongst other offers and score their dream home.

Sell your home as-is

One way to avoid contingencies from the start is to sell your home with an “as-is” label. While this may not avoid all types of contingencies, it does signal to buyers that a homeowner is not interested in making repairs — even those that come up during an inspection.

This strategy may be more likely to attract buyers who are investors or flippers. Investors and flippers oftentimes make all-cash offers, which could potentially remove the appraisal and financing contingencies as well.

For the right price and with the right marketing strategy, you can find interested buyers who won’t shy away from a contingency-free sale.

Request a cash offer on your home

If you list your home on the market and cross your fingers that a traditional buyer will pay all cash, you could be waiting a while since the majority of buyers need a mortgage. Instead of wishing and hoping, you can find a cash buyer who prefers to purchase off-market through an online platform, such as HomeLight’s Simple Sale.

Worried About Your Home Sale Falling Through?

Sell when you’re ready without the hassle of paying for repairs, prepping for listing, or dealing with showings. HomeLight’s Simple Sale platform connects motivated sellers with cash buyers, allowing owners to sell quickly and confidently.

Request Offer

Get a pre-listing inspection and provide a disclosure packet upfront to get in front of contingencies.

With a pre-listing inspection, the seller pays for a certified inspector to investigate the house and point out any and all issues.

A pre-listing inspection isn’t a guarantee that the buyer will waive their inspection contingency. However, as the seller, you can present your inspection information as well as any receipts for repairs you’ve made. This can ward off big surprises before closing, give buyers peace of mind that they aren’t purchasing a lemon, and lessen the list of an inspection contingency scuttling a deal.

Of course, with a pre-listing inspection, the cat’s out of the bag on the condition of your home. Anything you learn, good or bad, from the inspection you are now obligated to disclose to buyers. This means that any issues revealed by the inspection may need to be factored into the listing price of the home.

Navigate contingencies with your agent’s expertise

The majority of home sales will include a contingency of some kind, as buyers seek to protect their interests. The fewer roadblocks on the way to closing, the better. When in doubt, working with a top local agent can help make navigating the complexities of contingent offers more manageable.

Header Image Source: (Mathew Addington / Death to the Stock Photo)