What is a home of choice contingency in a real estate contract? A home of choice contingency is a contingency that protects a seller from having to sell their current home if they haven’t found their next home. This way a seller can sell their home, which seems to be much easier than buying a home in this market of limited inventory, and just in case they can’t find a new home they like, they can declare the contract to sell their current home void, and call off the deal.
A home of choice contingency may read something like the below:
“This Contract is contingent until 45 Days after the Date of Ratification to allow the Seller to obtain a ratified contract to purchase another home, and then another 30 days for seller to obtain financing for their new home. This contingency will remain in effect unless the Seller delivers Notice, prior to the Deadline of this contingency, to the Purchaser that this Contract is void.”
Of course a buyer may lock himself or herself into this deal for a long while without knowing if the seller will find a new home to buy and actually sell their current home. However, in a market with such limited inventory, it seems there are buyers willing to take that risk.
As a buyer, if you don’t like this type of contingency that favors the seller, you could offer the seller a rent back period of up to 60 days, where you go to settlement on the seller’s house and become the new owner, but you let them live in the house and rent it from you for up to 60 days while they look for a new home. Of course the seller may reject this, and want the absolute safety of not having to sell their current house.
As with anything in real estate sales, it is all negotiable!