Home Sale Contingency.

Home Sale Contingency.

A home sale contingency is a powerful tool in real estate transactions, providing protection for buyers who need to sell their current home before purchasing a new one, and presenting both risks and opportunities for sellers. Here’s how it works—and what both buyers and sellers need to know.

What Is a Home Sale Contingency?

A home sale contingency is a clause in a real estate contract stating that the buyer’s purchase of a new property depends on the successful sale of their existing home by a specified date. If the buyer’s home doesn’t sell in time, the contract can be canceled without penalty, and the earnest money is typically refunded to the buyer.

How It Works for Buyers

• Financial Protection: If you need the proceeds from your current home to buy your next one, a home sale contingency ensures you’re not forced to carry two mortgages or risk losing your earnest money deposit.

• Negotiation Leverage: You can make an offer on your dream home without having already sold your current property, but your purchase only moves forward if your sale closes on time.

• Timeline: The contingency will specify a deadline by which your home must sell. If it doesn’t, you can walk away from the contract without penalty.

How It Works for Sellers

• Conditional Sale: Accepting an offer with a home sale contingency means your sale is not guaranteed until the buyer’s home sells. If their sale falls through, your deal does too, and you may need to relist your home.

• Continued Marketing: Many sellers keep their listing “active” so they can consider backup offers while the contingency is in place.

• Kick-Out Clause: Sellers often negotiate a “kick-out clause,” allowing them to continue showing the home and accept another offer if a better, non-contingent buyer comes along. The original buyer then has a set period (often 24-72 hours) to remove the contingency or forfeit the contract.

Pros and Cons

For Buyers	For Sellers
Reduces the risk of double mortgages	May delay or jeopardize closing
Allows time to sell current home	Can keep the home on the market (kick-out)
Makes the offer less competitive	Risk of the buyer’s sale falling through

Key Takeaways

• For Buyers: A home sale contingency gives you peace of mind and financial protection, but may make your offer less attractive in a competitive market.

• For Sellers: Accepting a home sale contingency carries risk, but a kick-out clause can help protect your interests and keep your sale moving forward.

Bottom line:
A home sale contingency can be a win-win when both parties understand the risks and protections involved. Buyers should use it to safeguard their finances, while sellers should negotiate terms that minimize delays and keep their options open.

If you’re considering a home sale contingency, work closely with your real estate agent to craft a contract that meets your needs and keeps your transaction on track.

Written by Malcolm Davis of Homevets Realty LLC.

📞 Contact me at 254-419-5073
📧 Email me at mrdavis324@outlook.com

🔗 Learn more & connect today: www.malcolm.homevetsrealty.com

Understanding Contingencies in Real Estate: What Buyers and Sellers Need to Know

When you’re buying or selling a home, you’ll likely hear the word “contingency” come up during negotiations. But what exactly does it mean, and how does it impact your transaction? Here’s a straightforward guide for both buyers and sellers.

What Is a Contingency?

A contingency is a condition written into a real estate contract that must be met for the sale to move forward. If the contingency isn’t satisfied within a certain timeframe, the party it protects (usually the buyer, but sometimes the seller) can walk away from the deal without penalty.

Contingencies act as safety nets, protecting you from unexpected issues, like problems uncovered during inspection or trouble securing financing.

Common Types of Contingencies

For Buyers

• Inspection Contingency

• Let buyers have the home professionally inspected.

• If major issues are found, buyers can negotiate repairs, ask for a price reduction, or back out entirely.

• Appraisal Contingency

• Ensures the home appraises at or above the agreed purchase price.

• If the appraisal is low, buyers can renegotiate or cancel the contract.

• Financing (Mortgage) Contingency

• Gives buyers time to secure a mortgage.

• If financing falls through, buyers can exit the deal without losing their earnest money.

• Home Sale Contingency

• Allows buyers to make the purchase dependent on selling their current home.

• If they can’t sell in time, they can withdraw from the contract.

For Sellers

• Purchase Contingency

• Sometimes, sellers include a contingency that they must find and secure a new home before finalizing the sale of their current one.

• Title Contingency

• Ensures the property’s title is clear of liens or legal issues before closing.

How Do Contingencies Work?

1. Negotiation

• Contingencies are discussed and agreed upon when the offer is made.

• Both parties must sign off on all contingencies for them to be valid.

2. Timeframes

• Each contingency has a deadline (e.g., 7 days for inspection).

• If the condition isn’t met by the deadline, the protected party can cancel the contract or renegotiate terms.

3. Resolution

• If the contingency is met (e.g., the home passes inspection), the sale moves forward.

• If not, the contract can be voided, and the earnest money is usually refunded to the buyer.

Why Are Contingencies Important?

• For Buyers: They offer protection against surprises, such as hidden damage or financing issues.

• For Sellers: They clarify what needs to happen for the sale to close and can protect against buyers who aren’t fully committed.

Pros and Cons

Pros for Buyers	Cons for Buyers	Pros for Sellers	Cons for Sellers
Protects earnest money	Too many contingencies can weaken	Clarifies the buyer’s obligations	May delay or jeopardize the sale
Allows for negotiation	Your offer in a competitive market	Can negotiate deadlines	May have to accept more risk
Provides exit options	May lose out to non-contingent offers

Key Takeaways

• Contingencies are customizable; work with your real estate agent to determine which ones are necessary for your specific
  situation.

• Don’t overdo it: Too many contingencies can make your offer less attractive, especially in a seller’s market.

• Deadlines matter: Missing a contingency deadline can mean losing your protections.

In summary:
Contingencies are essential tools for managing risk in real estate transactions. Buyers and sellers should understand how they work, negotiate them carefully, and use them to ensure a smooth, fair, and secure home sale or purchase.

Written by Malcolm Davis of Homevets Realty LLC.

📞 Contact me at 254-419-5073
📧 Email me at mrdavis324@outlook.com

🔗 Learn more & connect today: www.malcolm.homevetsrealty.com

Who Is Eligible for a VA Home Loan?

 Who Is Eligible for a VA Home Loan?

By Malcolm Davis, Realtor & Veteran

If you’re a service member, veteran, or surviving spouse thinking about buying a home, you’ve probably heard about the VA home loan. As both a veteran and a real estate agent, I get this question all the time: Who is eligible for a VA home loan? Here’s what you need to know for 2025.

1. Service Requirements

The VA home loan is a benefit designed for those who have served in the military. To be eligible, you must meet specific service requirements based on when and how you served. Here are the basics:

• Active Duty Service Members:

• At least 90 continuous days of active service.

• Veterans:

• The minimum service duration varies by era, typically 90 days during wartime or 181 days during peacetime.

• For those who served after August 2, 1990, it’s usually 24 continuous months or the full period called to active duty (at least 90 days).

• National Guard & Reserve Members:

• At least six years of service, with certain conditions (such as being honorably discharged or called to active duty for at least 90 days).

• Surviving Spouses:

• Unremarried spouses of service members who died in service or from a service-connected disability, and in some cases, spouses of veterans who were disabled at the time of death.

2. Certificate of Eligibility (COE)

You’ll need a Certificate of Eligibility (COE) to prove your service qualifies you for the program. Most lenders can help you get this quickly with your Social Security number and service details, or you can request it directly from the VA.

3. Additional Requirements

• Primary Residence:
  The home must be your primary residence, not a vacation or investment property.

• Credit & Income:
  You must meet your lender’s credit and income requirements, including residual income and debt-to-income guidelines.

• Funding Fee:
  Most borrowers will pay a one-time VA funding fee, though some (such as those with service-connected disabilities) may be exempt.

4. What If I Don’t Meet the Standard Requirements?

If you were discharged for hardship, certain medical conditions, or a reduction in force, you may still qualify. Always ask your lender or the VA for a review if you’re unsure.

Why Use a VA Loan?

VA loans offer no down payment, no private mortgage insurance, and competitive rates, making homeownership more accessible for those who’ve served.

Bottom Line:
If you’ve served in the military or are a qualifying surviving spouse, you may be eligible for a VA home loan. The first step is checking your service history and applying for your COE. If you have questions about your eligibility or want to start the process, reach out—I’m here to help fellow veterans and their families achieve their homeownership dreams.

If you’re a family member of a deceased military member, you might wonder if you can use a VA home loan to buy or refinance a home. Here’s what you need to know about VA loan eligibility for surviving family members:

Can a Family Member of a Deceased Military Member Use a VA Loan?

The VA home loan benefit is primarily for veterans, active-duty service members, and certain surviving spouses, not for children or other relatives. Here’s how it works:

1. Surviving Spouses: Who Qualifies?

A surviving spouse may be eligible for a VA-backed home loan if at least one of these is true about the deceased veteran:

• The veteran died while in service or from a service-connected disability, and you did not remarry.

• The veteran died while in service or from a service-connected disability, and you remarried only after age 57 or after December 16, 2003.

• The veteran was missing in action or a prisoner of war.

• The veteran had been totally disabled and then died, even if the disability was not the cause of death (in certain cases).

To use this benefit, the surviving spouse must obtain a Certificate of Eligibility (COE) from the VA and meet the lender’s credit and income requirements.

2. Children and Other Family Members

Children of veterans do not qualify for a VA home loan in their own right unless they are also eligible veterans or service members themselves. The VA loan benefit is not transferable to children, siblings, or parents.

However, if a child inherits a home with an existing VA loan, they may be able to assume the loan—meaning they take over the payments and the mortgage terms—if they meet the lender’s requirements. This is not the same as getting a new VA loan, and the process can be complex.

3. What Happens to a VA Loan After the Veteran Dies?

• The loan does not get paid off by the VA if the veteran passes away. The surviving spouse or estate is responsible for continuing payments.

• If a surviving spouse is on the mortgage or inherits the property, they may continue making payments or refinance the loan, possibly using VA loan benefits if eligible.

Summary Table

Family Member	Eligible for New VA Loan?	Can Assume an Existing VA Loan?
Surviving Spouse	Yes (if criteria met)	Yes (if on title or inherits)
Child/Other Relative	No	Possibly (if inheriting the home)

In conclusion:

Only surviving spouses who meet specific VA criteria can get a new VA home loan based on a deceased veteran’s service. Children and other family members are not eligible for new VA loans, but may be able to assume an existing VA loan under certain circumstances. If you’re a surviving spouse, start by applying for a Certificate of Eligibility through the VA to see if you qualify