What Is a Home Sale Contingency in California—and When Should You Use One?
In California’s competitive housing market, timing matters. Whether you’re upsizing, relocating, or buying your next home across town, a common challenge arises: how to buy a new home before your current one sells.
This is where a home sale contingency comes in.
What Is a Home Sale Contingency?
A home sale contingency is a clause in a purchase agreement that makes your offer conditional on the successful sale of your current home. It protects you from owning two properties at once—or from being forced to close on a new home without the funds from your existing one.
In California, this clause is included in the California Residential Purchase Agreement (RPA) using Contingency of Sale or Purchase Addendum (Form COP) provided by the California Association of Realtors.
How It Works
When you submit an offer on a home, the contingency makes it clear:
you’ll only proceed with the purchase if your current home sells by a specified date.
If your home doesn’t sell in time, you have the right to back out without losing your deposit.
Why Use One?
- You’re relying on proceeds from your current home to fund the purchase
- You want to avoid overlapping mortgages or temporary housing
- You need time to line up timelines for escrow and move-in/out dates
Risks in a Hot Market
In Southern California markets like San Diego, Orange County, or Temecula, sellers often receive multiple offers. A contingent offer can be viewed as less attractive, especially if other buyers are ready to move forward without one.
How to Strengthen a Contingent Offer
If you need to use a home sale contingency, you can still stand out by:
- Pricing your current home aggressively to move quickly
- Providing proof that your home is already listed or in escrow
- Offering a strong earnest money deposit
- Shortening the contingency period to reduce the seller’s risk
- Waiving minor contingencies elsewhere (like minor repair credits)
Alternatives to a Home Sale Contingency
If the market isn’t favorable for contingent offers, consider:
- A bridge loan to cover the gap
- A HELOC (home equity line of credit) on your current property
- Selling your home first and negotiating a seller rent-back
- Using cash reserves or short-term financing for flexibility
Should You Use a Contingency?
It depends on your finances, your timeline, and how competitive the market is where you’re buying. At Impact Realty, we walk you through your options and help you make the strongest offer possible—contingency or not.
Final Thought
The home sale contingency is a useful but not a one-size-fits-all solution.
If you’re considering buying and selling at the same time in California, talk to a local expert who can help you time it right and avoid unnecessary risk.
