Recently a buyer told one of our loan officers why she lost the house she wanted. In her words: "I didn't get it because I had a contingency in there that I had to sell this place first."
That sentence explains more lost offers than any rate sheet ever will. If you need to sell your current home to buy the next one, here is how sale contingencies work in Connecticut, what a Hubbard clause does, and what your options are when a seller won't wait.
A home sale contingency makes your purchase conditional on selling the house you already own. If your home doesn't sell by a set date, you can walk away from the new purchase without losing your deposit.
For the buyer, that's protection. For the seller, it's risk. The seller is taking their home off the market and betting that a house they've never seen, priced by someone they don't know, sells on time.
In Connecticut, sellers who accept a contingent offer often add a Hubbard clause, sometimes called a kick-out clause. It lets the seller keep marketing the home after accepting your offer.
If another buyer comes along with a stronger offer, the seller notifies you, and you get a short window, commonly 72 hours, though the exact terms are negotiable, to do one of two things:
Your attorney will write and review the exact language, and it varies from contract to contract. The practical effect is the same: a Hubbard clause keeps you in the deal only until someone with more certainty shows up.
For a closer look at the clause itself, including how to avoid needing one, see our Hubbard clause guide for Connecticut buyers.
When a seller compares offers, price is only part of the decision. They are also asking who is most likely to make it to the closing table.
A sale contingency stacks a second transaction on top of the first. Your buyer's financing, your buyer's inspection, and your buyer's timeline all become the seller's problem. In a competitive market, a seller with a cash offer or a non-contingent offer in hand usually takes it, even at a similar price.
There is also a timing risk on your side. As AFC CEO Gaetano Ciambriello puts it: "If you make your purchase depend on selling your home, and then your buyer needs to push closing back a week, you're suddenly at risk of losing the deposit on the house you're buying."
1. Make the contingent offer anyway. It can work when inventory is loose and the seller has no other offers. Expect a Hubbard clause, and have a plan for what you'll do if you get the 72-hour notice.
2. Sell first, then buy. This removes the contingency, but it can mean moving twice or renting in between, and you're shopping on someone else's clock.
3. Use a HELOC on your current home. Some buyers can tap equity for a down payment. Many banks will not open a home equity line on a house that is already listed for sale, so this works best when it is set up before you list.
4. Use a bridge loan to make a non-contingent offer. A bridge loan lets you borrow against the equity in your current home to buy the next one first, then sell on your own timeline and pay the bridge off from the sale. To the seller, your offer can look a lot like cash (see bridge loan vs cash offer programs in Connecticut): no home sale contingency, and depending on the structure, no mortgage or appraisal contingency either.
A bridge is not the cheapest money available, and any lender who tells you otherwise isn't being straight with you. The right question is what it costs compared to losing the house, carrying two moves, or paying rent in between.
Before you write an offer, get three answers:
If the honest answer to the second question is "very competitive," a contingent offer with a Hubbard clause is a hope, not a plan.
AFC Mortgage Group helps Connecticut buyers compare all of these options side by side, including bridge financing that lets you buy before you sell. Want to talk through your numbers before you write an offer? Contact our team or read more about AFC bridge loans.
Written by Gaetano Ciambriello, CEO of AFC Mortgage Group (NMLS #1783508). AFC Mortgage Group LLC | NMLS #2801 | Monroe, CT | Equal Housing Lender. This article is educational and is not a commitment to lend. All loans are subject to credit approval and program guidelines.
Become homeowners. AFC Mortgage Group will help you navigate the loan process, secure financing, and purchase your dream home.
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