Selling your home in San Jose is exciting, but when a buyer submits a contingent offer, it can also be nerve-wracking. A contingent offer means the buyer wants to purchase your home, but their ability to close depends on a condition—most commonly, the sale of their current property. Accepting a contingent offer isn’t automatically good or bad; it requires careful evaluation of risk, timing, and your personal goals.
I’m Dennis Loewen with North and Main Homes, and here’s a detailed guide to help San Jose sellers make confident decisions when faced with contingent offers.
Understanding Contingent Offers
A contingency is a clause in a purchase contract that must be satisfied before the sale can close. The most common contingencies involve the buyer’s ability to sell their existing home, but others can include inspection outcomes, loan approval, or appraisal results.
For sellers, contingencies introduce uncertainty. Unlike a standard offer, you can’t guarantee the deal will close on schedule. On the flip side, contingent offers can signal serious buyers willing to navigate their own risks in order to purchase your home. Understanding the details of the contingency is key before moving forward.
Step 1: Verify the Buyer’s Current Sale
The most important factor when evaluating a contingent offer is the buyer’s ability to fulfill the contingency—most often, selling their current home. Ask your agent to confirm:
-
Is the buyer’s home listed on the MLS?
-
Is the listing priced appropriately for the market?
-
Are there active showings or pending offers?
A buyer with an aggressively priced and actively marketed property has a higher chance of closing, which reduces your risk. Conversely, a buyer whose home has been on the market for months, or who is overpricing, may struggle to meet the contingency, which can create delays or a failed sale.
Step 2: Set Clear Deadlines and Protections
Contingent offers should include defined timelines so you aren’t left in limbo. Common elements include:
-
Escalation windows: How long the buyer has to go under contract on their property.
-
Contingency removal deadlines: When the buyer must remove their contingencies to move forward.
-
Seller exit clauses: If the buyer cannot meet deadlines, you retain the right to cancel the contract and consider other offers.
Well-structured contingencies protect you while keeping the deal fair for both sides. Your agent can help negotiate terms that ensure you remain in control and avoid unnecessary delays.
Step 3: Consider the Pace of the Market
Local market conditions are critical in deciding whether a contingent offer makes sense. In slower markets, accepting a contingent offer may keep momentum moving and prevent your home from sitting unsold for months.
In a hot, competitive San Jose market, however, you may have multiple buyers ready to submit clean offers with fewer contingencies. In that case, it might be more advantageous to wait for a stronger offer that guarantees a faster, smoother close.
Your agent can analyze local trends, inventory levels, and recent sales to determine if the contingent offer is truly competitive or if you should hold out.
Step 4: Weigh the Pros and Cons
Pros of Accepting a Contingent Offer:
-
Keeps your home under contract while the buyer resolves their own sale.
-
Can create leverage if other buyers know your home is in demand.
-
Allows a motivated buyer to take time to finalize their financing or inspection.
Cons of Accepting a Contingent Offer:
-
Timing uncertainty may delay your move or the closing.
-
There’s a risk the buyer’s home doesn’t sell, leaving you back on the market.
-
It may discourage other buyers from making offers if they assume the home is already pending.
Each situation is unique, so weighing the potential gains against the risks is crucial before accepting a contingent offer.
Step 5: Keep Your Options Open
One strategy to reduce risk is to allow backup offers. By keeping the door open to additional offers, you maintain flexibility. If the contingent buyer fails to close, you can quickly pivot to a strong backup without losing momentum.
Your agent can help structure contracts and timelines that protect your interests while keeping the sale on track.
The Bottom Line
Contingent offers can be a valuable tool in San Jose’s real estate market, but they require careful evaluation. The most successful sellers verify the buyer’s situation, set clear deadlines, assess market conditions, and weigh pros and cons before making a decision.
With the right guidance, you can navigate contingent offers with confidence, minimizing stress while maximizing your home’s value and your timeline flexibility.
🎥 Watch the full video here → Contingent Offer? Here’s What to Do
Need help assessing contingent terms and negotiating your San Jose home sale? Reach out to Dennis Loewen with North and Main Homes for expert guidance and a strategy tailored to your situation.
