The professional real estate agent, representing a Seller who receives a “contingent offer” from a Buyer will often say: “With a contingent offer where the Buyer buys  ‘contingent’ or conditioned upon on the sale of its own house, the Seller must take some extra steps to protect itself.   With a contingent sale, the Seller is a ‘hostage’ and the Buyer is in the driver’s seat.”

The agent makes this assessment because of the nature of the Northwest Multiple Listing Service forms on contingent sales, beginning with NWMLS Form 22B.   Unless a Seller is able to ‘bump’ a contigent offer the contigent Buyer might be able to tie up the Seller’s property for months.

 Protections for the Seller:  (1) do a CMA on the contingent property and set a maxium price for contigent-buyer’s property, so the contigent Buyer has a decent chance to sell and doesn’t merely delay a closing; (2) get a very healthy earnest money in case the contigent buyer stretches things out to the very end (could be 12o days) and then defaults, doesn’t close and walks away willing to leave earnest money behind. 

We are seein more contingent sales these days calling for fresh thinking on Seller protection.