What is it? Do I need it? Is it attractive? How does it work?
In Maryland residential real estate transactions, you can offer to buy a home and make that purchase contingent on you selling another property. In most cases, you see this with move-up buyers and they are selling their smaller or less expensive house to purchase a larger or more expensive house. The contingency is not specific to the residence you live in, just a residence that you own.
To be clear, this is not a very attractive option for sellers. Most sellers want to see a non-contingent contract placed on their house, simply because it's easier to deal with. In 2018, we saw a lot more contingent contracts than I've seen in the past 5 years.
You may or may not need this contingency in your offer. If you can afford two or more mortgage payments at one time, you don't really need this in you offer. Again, it's not very attractive to sellers when you're making your case to buy their home. There are cases where the only way you can purchase the new home, is with the proceeds from the sale of the residence you own. Your lender will be able to qualify you based on your assets and put a plan together for you and your realtor to get the new house.
When you put a contingency like this in an offer in Maryland, you set deadlines for your property you own to receive 3 things...
1) an offer - someone needs to write an offer on your house and you need to come to terms in writing on that in the form of a contract;
2) a loan commitment - that buyer for your house if they are obtaining a loan, needs to present a loan commitment letter to your realtor by the deadline set;
3) a closing - the buyer for your house needs to close on it by the deadline;
There is a 4th option to have a deadline of a lease on your property by a certain time. This is seldom used but can be if you can afford that option and still qualify. Your lender will tell you in advance if this is a real option.
If you have any specific questions or want me to elaborate on this, comment below!