What is a home sale contingency in Sioux Falls?

A home sale contingency means the buyer’s purchase depends on selling and closing on their current home. For sellers, the key question is not just price. It is whether the buyer’s timeline, risk, and backup terms protect your move.

You get an offer on your Sioux Falls home. The price looks good. The buyer seems serious. Then you notice one line that changes the whole conversation: the offer is contingent on the sale and close of the buyer’s current home.

That does not automatically make it a bad offer. It does mean you need to evaluate the risk.

Home sale contingencies are common with move-up buyers across Sioux Falls, Brandon, Tea, Harrisburg, Dell Rapids, Luverne, and the surrounding metro. Many buyers cannot buy the next home until their current home sells. But if you are the seller, their timing issue can become your timing issue.

If you are selling in the $400,000 to $1,000,000 range and also trying to buy your next home, this clause matters. It can affect your closing date, your leverage, your backup options, and your next purchase.

Why a home sale contingency matters to a seller

A home sale contingency makes the buyer’s purchase dependent on another transaction. If their home does not sell, if their buyer’s financing falls apart, if their inspection negotiation gets messy, or if their closing is delayed, your sale may be affected too.

The National Association of REALTORS® puts it plainly: “A signed real estate purchase agreement is not a guarantee of a home sale,” and its consumer guidance notes a recent REALTORS® Confidence Index Survey showing about a 5% transaction fallout rate (National Association of REALTORS®). NAR also identifies a buyer’s home not selling as a roadblock when sellers have accepted a home-sale contingency (National Association of REALTORS®).

For a Sioux Falls seller, that means the offer has to be judged on more than price. A strong contingent offer may be worth accepting. A weak one can tie up your listing while better buyers move on.

What the South Dakota purchase agreement says

South Dakota’s purchase agreement form includes a specific section for the sale of the purchaser’s property. It allows the parties to mark whether the offer is or is not contingent on the sale and close of property owned by the purchaser (South Dakota Real Estate Commission purchase agreement).

The same section gives sellers an important protection. It says the seller has the right to continue to offer the property for sale and accept offers, subject to the buyer’s rights under the agreement (South Dakota Real Estate Commission purchase agreement).

If the seller accepts another offer, the form says the seller gives the original buyer written notice. The buyer then has a stated number of days to waive the sale-and-close contingency, or the agreement terminates and deposits are returned according to the earnest money paragraph (South Dakota Real Estate Commission purchase agreement).

The difference between “listed,” “under contract,” and “closed”

Not all home sale contingencies carry the same risk. The buyer’s current home status matters.

If the buyer’s home is not listed yet, that is usually the highest-risk version. They still have to prepare, price, market, negotiate, inspect, appraise, and close their own property.

If the buyer’s home is listed but not under contract, the risk is lower, but still real. You will want to know how long it has been listed, whether the price is realistic, and what the showing activity looks like.

If the buyer’s home is already under contract, the risk may be more manageable. But their buyer still has to clear inspection, appraisal, financing, title, and closing.

If the buyer’s sale is already past major contingencies and just waiting to close, the offer may be closer to a settlement contingency than a broad home-sale contingency. That can be much stronger, but the exact language still matters.

What is a kick-out clause?

A kick-out clause is one way sellers protect themselves when accepting a contingent offer. Rocket Mortgage explains that a kick-out clause allows sellers to continue showing and soliciting offers after accepting an offer with contingencies, and it is often used when the buyer’s offer depends on selling their current home first (Rocket Mortgage).

The basic idea is simple. You accept the contingent offer, but if a stronger non-contingent offer comes in, the first buyer gets a limited time to remove the contingency or step aside. Rocket Mortgage notes that this period is often 72 hours, though the contract controls the exact timing (Rocket Mortgage).

Opendoor’s buyer and seller timing guide says home sale contingencies often run 30 to 60 days, and a kick-out clause may give the buyer 24 to 72 hours to remove the contingency or step aside if a non-contingent offer appears (Opendoor).

For sellers in Sioux Falls, the value is flexibility. You are not completely frozen while waiting on the buyer’s current home. But you need clear written terms.

When a contingent offer may be worth accepting

A home sale contingency is not automatically a deal killer. In some situations, it may be a smart move.

It may be worth considering when:

The buyer’s current home is already under contract.

Their closing date lines up with your desired closing date.

Their current property is in a market where it should draw strong buyer interest.

The price, earnest money, financing, inspection terms, and appraisal terms are strong.

The buyer agrees to a clear kick-out structure.

You do not have another offer with cleaner terms.

Your own move has enough flexibility to absorb some timing risk.

This comes up often with move-up buyers in the Sioux Falls metro. A buyer in Brandon, Tea, or Harrisburg may need equity from one home before buying the next. The question is whether the offer protects you well enough.

When sellers should be cautious

Be more cautious when the buyer’s current home is not listed, the timeline is vague, the buyer is asking for a long contingency period, or the offer is not strong enough to justify the uncertainty.

Also be careful if you are using your proceeds to purchase another home. If your sale gets delayed, your purchase may be affected too.

NAR’s guidance tells sellers to talk with their agent upfront about how flexible they can be on the closing date when a buyer’s home sale may be a roadblock (National Association of REALTORS®). Flexibility is not just a nice idea. It is a risk factor.

Before accepting, ask:

How far along is the buyer’s current home sale?

Is their home already listed, under contract, or just a plan?

How many days do they have to remove the contingency?

Can you continue marketing and showing your home?

What are your rights if another offer comes in?

How this affects title, closing, and seller costs

In the Sioux Falls area, closings are typically handled by a title company. If a home sale contingency affects the closing date, the title company, lender, and agents may need to coordinate updated documents and timing.

South Dakota has a property sales tax of $1 for every $1,000 of sale price. In plain language, a $600,000 sale would mean $600. Confirm final figures with the title company and your tax or legal professional.

If the buyer’s current home sale is delayed, your closing may need an amendment. If the buyer removes the contingency, they may need to show funds for closing. South Dakota’s purchase agreement form says that when the buyer waives the sale-of-property contingency, the buyer warrants and will provide proof that funds needed for closing are available and financing is not contingent on another sale or close (South Dakota Real Estate Commission purchase agreement).

That is the kind of detail sellers should care about. It is not just “Can the buyer remove the contingency?” It is “What proves they can still close?”

My practical advice for Sioux Falls sellers

When you review a home sale contingency, do not look at it as a yes-or-no issue. Look at it as a risk package.

A strong contingent offer with a buyer already under contract, a short deadline, strong financing, meaningful earnest money, and a clear kick-out clause may be worth serious consideration. A vague contingent offer from a buyer whose home is not even listed yet may not be.

The best offer is not always the biggest number. It is the offer most likely to close on terms that work for you. Craig Bertrand, REALTOR® with Berkshire Hathaway HomeServices Midwest Realty, helps Sioux Falls metro sellers compare contingency language, timing risk, buyer financing, seller net, and next-step options.

FAQ

Should I accept an offer contingent on the buyer selling their home?

Maybe. It depends on how far along the buyer’s sale is, how strong the rest of the offer is, and whether the contract protects your timeline. A buyer already under contract is usually less risky than a buyer who has not listed yet.

Can I keep showing my Sioux Falls home after accepting a contingent offer?

Possibly, depending on the contract. South Dakota’s purchase agreement form includes language allowing the seller to continue offering the property for sale and accept offers, subject to the purchaser’s rights, when the sale-of-purchaser-property section applies (South Dakota Real Estate Commission purchase agreement).

What happens if another buyer makes a better offer?

If the contract includes the right structure, the first buyer may have to waive the home sale contingency within the written deadline or the agreement may terminate. The exact notice period and options depend on the signed agreement.

Internal link suggestions

Link to: “Should You Sell First or Buy First? A 2026 Guide for Sioux Falls Move-Up Buyers”

URL: https://realtorcraigbertrand.com/should-you-sell-first-or-buy-first-a-2026-guide-for-sioux-falls-move-up-buyers/

Link to: “Offers, Negotiations, and Contracts in Sioux Falls: Your Questions Answered (Part 3 of 5)”

URL: https://realtorcraigbertrand.com/offers-negotiations-and-contracts-in-sioux-falls-your-questions-answered-part-3-of-5/

Link to: “Home Financing, Costs, and Timelines in Sioux Falls: Your Questions Answered (Part 4 of 5)”

URL: https://realtorcraigbertrand.com/home-financing-costs-and-timelines-in-sioux-falls-your-questions-answered-part-4-of-5/

Link to: “What Happens If the Appraisal Comes in Low When Selling a Home in Sioux Falls?”

URL: https://realtorcraigbertrand.com/what-happens-if-the-appraisal-comes-in-low-when-selling-a-home-in-sioux-falls/

If you’re thinking about buying or selling in Sioux Falls or the surrounding area and want someone to walk you through the details, call or text Craig Bertrand, REALTOR® with Berkshire Hathaway HomeServices Midwest Realty, at 605-951-8421.