What happens when your clients need to sell their current home before buying their next one? This type of contingent sale transaction is common, but it’s also one of the biggest hurdles buyers face in the housing market. Buyers often feel stuck, unable to move forward without first unlocking the equity from their current property. Sellers, in turn, may hesitate to accept a contingent offer, fearing delays or failed closings.
The result? Deals fall apart, timelines get extended, and everyone, from real estate agents to loan officers, is left managing a process far from ideal. For clients, it can feel like balancing on a tightrope between two homes, unsure of which step to take next.
But here’s the thing: lenders don’t have to watch from the sidelines. With the proper support and programs, they can remove uncertainty and give buyers the confidence to proceed. From innovative financing solutions to strategic guidance, there are ways to transform a potentially stressful transaction into a smooth and successful one.
This article explores what contingent sale transactions really mean, why they often stall progress, and how lenders can actively help clients bridge the gap between selling and buying.
What is a Contingent Sale Transaction and Why Is It So Challenging?
At its core, a home sale contingency means a buyer’s offer on a new property depends on the successful sale of their existing home. It’s a common scenario, especially for move-up buyers who need to access their home equity before securing a new mortgage.
But while this contingency protects buyers from carrying two mortgages simultaneously, it introduces layers of complexity that can slow down or derail the process. Sellers are often wary of contingent offers because they tie the success of their own transaction to the performance of a buyer’s home sale. In a competitive market, this hesitation can lead sellers to favor non-contingent offers, even if they’re lower, simply for the promise of a quicker, cleaner closing.
Two Common Types of Home Sale Contingencies
Home sale contingencies aren’t all created equal. Depending on where buyers are in their selling journey, lenders and agents might encounter two primary types:
- Sale and settlement contingency
This gives buyers time to sell their current home and use the proceeds for the new purchase. It covers both selling and closing on the old property. - Settlement contingency
Used when the buyer’s current home is already under contract, but they’re waiting for the sale to close.
Why Do Contingencies Make Sellers Nervous?
It’s not hard to see why sellers hesitate to accept a contingent offer. While they understand buyers’ need to free up funds, contingencies often bring a layer of unpredictability to their own plans. Here are some common concerns:
- Will the buyer’s home sell fast enough?
- What if their deal falls through—does mine collapse too?
- Are there backup offers in place?
These worries often push sellers toward cash buyers or non-contingent offers, even if that means accepting slightly less favorable terms.
The Risks and Benefits of a Contingent Sale Transaction
A contingent offer may let buyers bid on a home, but it’s not without its complications. While it helps protect them from financial strain, sellers often view these offers with skepticism—especially in a fast-moving market where non-contingent offers dominate. Contingent sale transactions are more likely to fall through, and contingent offers typically have to bring more money to the table than a non-contingent offer.
For lenders and agents, understanding both sides of this dynamic is key to helping clients make informed decisions.
Key Benefits Buyers Can Count On
When done right, a contingent sale can deliver significant advantages:
- Financial protection – No risk of paying two mortgages at the same time.
- Greater flexibility – Clients don’t feel rushed to sell their existing home under pressure.
- Stronger position – They can unlock equity for a healthier down payment.
- Less stress during the move – A smoother transition between homes.
These benefits appeal especially to families upgrading to larger homes or relocating to new areas.
But there’s another side to the story, one that sellers, and often lenders, can’t ignore. Contingent offers can create delays, uncertainty, and even cause transactions to fall apart if the buyer’s home doesn’t sell quickly enough. Sellers may also reject these offers outright in competitive situations, preferring the certainty of non-contingent buyers.
For clients caught in this bind, lender-backed solutions become helpful and essential.
How Lenders Can Make a Difference in This Process
What if a lender could take the uncertainty out of a home sale contingency? For many buyers, the biggest barrier isn’t finding their next house, but figuring out how to bridge the gap between selling and buying without financial strain.
This is where lenders can help, offering solutions that make contingent offers stronger, smoother, and far less stressful for everyone involved.
Programs That Can Help
Forward-thinking lenders are leveraging creative financing tools to give buyers more flexibility and sellers more confidence in accepting their offers. Here’s how these solutions work in practice:
- Trade-In Mortgage
Calque’s Trade-In Mortgage is designed specifically for buyers who need to make a non-contingent offer while still relying on the equity in their current home. It works by paying off the existing mortgage balance and covering transaction-related costs upfront.
The buyer can also borrow against the equity in their old home and apply it to their new home. This approach eliminates the need for a home-sale contingency entirely, helping buyers compete in competitive markets without sacrificing financial security.
For agents and loan officers, it means fewer stalled transactions and happier clients who feel confident in their purchasing power.
- Bridge loans
A bridge loan offers short-term financing that helps buyers cover the down payment on their new home while they wait for their existing property to sell. These loans typically last six to twelve months and require strong credit and income qualifications.
While they’re an effective option for clients in a strong housing market, they can also come with higher interest rates and fees compared to traditional financing. They’re typically more expensive than a trade-in mortgage, because the entire next home is being purchased with alternative financing, instead of just the down payment. Lenders need to ensure clients fully understand the repayment terms and timing to avoid unnecessary financial stress.
- HELOC (Home Equity Line of Credit)
A Home Equity Line of Credit gives buyers flexible access to the equity in their current home, which they can use as a down payment on a new property. Unlike a bridge loan, a HELOC acts more like a credit card, allowing clients to draw only what they need.
However, because the original home hasn’t sold yet, buyers may still face the challenge of carrying two mortgage obligations simultaneously. For some clients, this is a manageable risk, especially if their home is in a high-demand market, but it’s not a one-size-fits-all solution.
The Calque Advantage
Calque’s Trade-In Mortgage goes a step beyond traditional bridge loans or HELOCs. It’s designed specifically to eliminate the home-sale contingency, helping agents and loan officers deliver a seamless experience to their clients.
By unlocking the equity needed for the down payment and allowing the homeowner to qualify for a conventional mortgage on the next home, Calque enables buyers to make stronger offers and avoid the stress of overlapping mortgage payments. For agents and loan officers, this means fewer stalled deals and happier clients.
Spotting Clients Who Need Contingency Support
Not every buyer will have a home sale contingency, but certain scenarios are strong indicators. Move-up buyers, those downsizing, or clients relocating for work often face the challenge of needing funds from their current home to move forward. Recognizing these clients early gives LOs a head start in presenting options that keep their purchase timelines on track.
Explaining Equity-Backed Programs Clearly
Programs like Calque’s Trade-In Mortgage are still unfamiliar to many buyers. That’s why loan officers are critical in breaking down how these solutions work. By explaining that the lender will pay off their existing mortgage and unlock equity near closing, LOs can help buyers understand how they can make non-contingent offers without taking on undue risk.
Clear, confident communication builds trust and helps clients feel comfortable moving forward.
Building Confidence in Contingent Transactions
Contingent sale transactions have long been a pain point for buyers and sellers alike. But with the right lender programs and proactive loan officers, these complex deals don’t have to feel like a gamble. Instead, they can become opportunities to guide clients through one of life’s biggest transitions with clarity and confidence.
By spotting the need for contingency removal early, explaining innovative solutions like Calque’s Trade-In Mortgage, and staying ahead of timing challenges, lenders can position themselves as indispensable partners in the homebuying process.
If your clients are facing a contingent sale transaction for selling current home, now is the time to explore programs that remove barriers and make every move feel seamless. Connect with Calque to learn how we help lenders deliver smarter solutions that keep deals moving.
