What is a Home of Choice Contingency?

By
Real Estate Agent with Long & Foster REALTORS®, Manassas, VA VA License # 0225089470

What is a Home of Choice Contingency?

A home of choice contingency is a contingency in a real estate sales contract that protects a seller from having to sell their current home if they haven't found their next home.

In Northern Virginia, our home of choice contingency is as follows:

CONTINGENT ON THE SELLER PURCHASING ANOTHER HOME.  This Contract is contingent on until 9pm ______ Days after the Date of Ratification ("Deadline") to allow the Seller to obtain a ratified contract to purchase another home.  This contingency will terminate at the Deadline and this Contract will remain in full force and effect unless the Seller delivers Notice, prior to the Deadline, to the Purchaser that this Contract is void.

What's most important for Northern Virginia sellers to realize is that if you aren't careful about watching the calendar on this one, you can end up in a contract to sell, regardless of finding another home, if you allow the deadline to pass without voiding the contract or re-upping the time frame in the contingency.

The desired time frame to fill in the blank will be determined in consultation with your real estate agent.  They will know how much inventory is on the market and how likely it is that you will find what you are looking for in your next home, particularly if you are moving to another home in the same market.  If not, your listing agent will need to consult with your out of area buyer's agent.   

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Rainer
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Leslie G. Rojohn
MoonDancer Realty - Sylva, NC
GRI, ABR ~ MoonDancer Realty

Never heard of a contingency like that, but between outs like that on the sellers side and due diligence outs on the buyers side, I sometimes wonder why we bother with contracts at all.  Maybe a handshake and a prayer would work just as well.

Mar 30, 2012 05:02 PM #1
Rainmaker
540,610
Rob D. Shepherd
Coldwell Banker Coast - Florence, OR
Principal Broker ABR, GRI

They don't sound like real sellers to me. Real sellers would rent,put it in storage or whatever if they hads a live buyer.

Mar 30, 2012 05:04 PM #2
Rainmaker
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Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

I've never heard of such a thing before. Must make it tough on buyers - not knowing if they're buying a home or starting the search all over again.

I had to chuckle - then agree with Leslie.

Mar 30, 2012 06:48 PM #3
Rainmaker
1,183,057
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Good Morning, i read it when you mentioned it in your other blog and that is what i thought, we call it something different but the premise is the same. I have to say it doe sget in teh way of some sales some times, only last week i had a buyer that ended negotiations and chose another home becuase teh seller insisted on this contingincy, the buyer could not want to wait.

Mar 31, 2012 06:32 AM #4
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Leslie:  Should a seller really be expected to sell if they can't find their next home?  Clearly they are serious enough about house hunting to put theirs on the market.  I can assure you, the home sale contingency on the buying end is not welcome if they conducted this in reverse.

Rob:  This is customary in our market of Northern Virginia.  Especially with the amount of bank owned inventory, there can't be a home sale contingency in their next purchase.

Marte:  There were a half dozen buyers lined up, willing to offer the home of choice contingency, to my last sellers who needed it.  In our market, it's not so unusual.

Scott:  And that happens.  But if a seller doesn't want to be locked into selling if they can't find another home, it wasn't meant to be with a buyer that can't wait.

Mar 31, 2012 09:29 AM #5
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Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Chris Ann - That what I guessed it was. It's very uncommon here - I think I've only seen it a couple of times over the years. Most buyers would strenuously object, since it leaves them in limbo on their purchase.

 

Mar 31, 2012 10:35 AM #6
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Dick:  Someone gets left in limbo when there is a move up or down size.  Either the seller has to write an offer to purchase their next home contingenct on the sale of their own, or the buyer to the seller's home uses this. 

Mar 31, 2012 11:50 AM #7
Rainmaker
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Donna Foerster
Cherry Creek Properties, LLC - Parker, CO
Metro Denver Real Estate Agent

Chris Ann~ Aha, now I understand.  This makes it clear that Real Estate is local.  This is not common practice in our market, but I may start using it in the right scenario.  Thank you for the education!

Mar 31, 2012 12:52 PM #8
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Debb Janes
The Carl Group, LLC - Camas, WA
REALTOR®, EcoBroker Camas, Washington

I haven't seen that, but you're right, it sure is important to keep track of all those little timing deadlines. That could sneak up on you and cause big problems.

Mar 31, 2012 01:26 PM #9
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Donna:  It is funny how things like this are not so common in other markets.

Debb:  Yeah.  This is one of those contingencies that can just magically go away and then the sellers are stuck selling whether they like it or not.

 

Mar 31, 2012 03:07 PM #10
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Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Chris Ann, this is my least favorite type of Contingency. Just makes it difficult for everyone.

Mar 31, 2012 03:26 PM #11
Rainmaker
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Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

It's rare in our market, and it's not in our contracts and personally I hope it doesn't happen.  If a seller wants to sell and the buyer is expecting to buy their home, and makes arrangments for this to happen and spends money on an inspection, etc. . . . the sellers can play this out and not sell to the buyer?!?  Again, we don't see this here that often and the sellers always seem to find another roof over their head.  We do rent-backs a lot more frequently.

Mar 31, 2012 06:28 PM #12
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Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Your Guide to Joyful Colorado Living!

Hi Chris Ann.  I see this on occassion and hate it.  Really....  if you weren't sure you wanted to move why did you list your house? 

Mar 31, 2012 06:30 PM #13
Rainmaker
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Tim Bradley
Contour Investment Properties - Jackson Hole, WY
Commercial Real Estate Expert in Jackson Hole, WY

That's a contingency that would kill deals in my market.

Apr 02, 2012 06:40 AM #14
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Connie:  Not sure there is a good place to put all the risk when it comes to a seller needing to find another home.

Carla:  Yep.  The Sellers could bail, but theoretically, the sellers are motivated to buy if they are placing their home on the market.

Belinda:  Consider all the bank involved sales.  Foreclosures.  Short Sales.  They don't allow home sale contingencies.  So this is the best way to go about it, if you have someone who doesn't want to do temp housing.

Tim:  The demand here in Northern VA is always higher than other markets thanks to the money the government throws around in hiring employees and contractors, so this isn't so unusual here.

Apr 02, 2012 08:17 PM #15
Anonymous
Daniela

what happens if the seller gets another contract two days before the contingency deadline and while doing the home inspection on the property they are buying they find some serious issues, could they still void their contract with the buyers of their home? Or does that contingency go away if the seller gets a contract before the deadline?

Sep 18, 2014 08:47 AM #16
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Chris Ann Cleland

Associate Broker, Northern VA
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