Home Sale Contingency in Texas
A plain-English guide for sellers weighing a contingent offer and buyers who need to sell first
A home sale contingency lets a buyer make an offer that depends on selling the home they already own. It can open the door to more buyers, or it can stall a sale. Here is how it works under the Texas forms, and how to use it well from either side of the table.
What Is a Home Sale Contingency? One of Several Types of Contract Contingencies
A home sale contingency is a condition in a purchase contract that makes the buyer’s obligation to buy depend on the sale of their current home. If the buyer’s home does not sell and close by an agreed date, the buyer can walk away and, under the standard Texas addendum, get their earnest money back. It protects the buyer from owning two homes and carrying two mortgages at once.
It is one of several types of contingencies a buyer can use. Most offers also depend on financing from a mortgage lender and on the home appraising near the purchase price, and buyers want time for a home inspection. Home sale contingencies are different because they tie the deal to a second property, a second buyer and a second closing. That is why your real estate agent, your lender and the other side all pay close attention when one shows up in an offer.
For the seller, a contingent offer is a trade. You gain a buyer who might otherwise be unable to make an offer at all, but you take on some of the risk of a house you do not control. In Texas, that trade is shaped by one specific form, and the way it is filled out matters more than most people realize.
Here in the Lake Houston area this comes up constantly. Many of the families touring homes in Kingwood, Humble and Atascocita already own a home nearby and are moving up, moving closer to work, or downsizing. That is why Stacy Sherman, Broker treats the contingency as a planning tool for both transactions, not just a box on the contract.
Home Sale Contingency at a Glance
Home Sale Contingency vs. Other Contingencies: Financing, Appraisal and Inspection
Search for contingency types and you will see the same four names: sale, financing, appraisal and inspection. Texas handles each one a little differently from other states, because the Texas Real Estate Commission promulgates the forms most residential agents must use. The biggest difference is inspection. The Texas resale contract does not use an inspection contingency at all; instead it offers an option period in paragraph 5, an unrestricted right to terminate for a negotiated number of days in exchange for an option fee paid to the seller.
Put simply, the option period gives a buyer the broadest exit for the shortest time, the financing and appraisal provisions cover the loan, and the sale contingency covers the buyer’s own house. A seller comparing offers should look at all of them together: an offer with a long option period, a financing contingency and a sale contingency carries more risk than the purchase price alone suggests.
How a Contingent Sale Works Under TREC Form 10-6: Step by Step
This is the typical path from offer to closing when a buyer needs to sell first. Every blank in the addendum is negotiable.
The buyer makes an offer with the 10-6 addendum
The buyer's agent attaches TREC 10-6 to the resale contract and fills in the address of the buyer's current home and the contingency date.
The parties negotiate the blanks
Three blanks do most of the work: the contingency date, the number of days the buyer gets to waive after a kick-out notice, and the additional earnest money required to waive. Price, option period and closing date are negotiated at the same time.
The seller keeps showing the home and takes backup offers
Because the addendum anticipates the seller accepting another written offer, the listing stays available for showings. A second buyer can sign a backup offer using TREC's Addendum for Back-Up Contract, form 11-9.
The buyer lists and sells their current home
The buyer's home goes on the market with a realistic price. Once it is under contract, everyone watches that second transaction closely, because the proceeds are what satisfy the contingency.
A kick-out notice, if another offer arrives
If the seller accepts another written offer, the seller notifies the first buyer in writing of the acceptance and that the waiver is required. The clock in paragraph B starts.
The buyer waives or steps aside
The buyer either waives the contingency in writing and deposits the additional earnest money, becoming a non-contingent buyer, or lets the deadline pass and the contract terminates with their earnest money refunded.
Both closings happen
In the best case, the buyer's sale closes first and funds the purchase, often on the same day or a few days apart, and nobody moves twice.
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The Kick-Out Clause, Explained
Paragraph B of the Texas addendum is what agents call the kick-out clause. It gives the seller a way out of a contingent contract without leaving the home off the market for weeks on a maybe. If a better or cleaner offer comes in and the seller accepts it, the seller sends written notice, and the first buyer must waive the contingency by the deadline or lose the house.
The number of days in that blank is a negotiation, not a fixed rule, so it is one of the most important numbers in the deal. A short window protects the seller; a longer one gives the buyer time to arrange a bridge loan or line up funds. Because time is of the essence in this addendum, a missed deadline by even a day can end the contract, and notices must be in writing and delivered the way the contract specifies.
Waiving is a serious step. Once a buyer waives, they are committing to close whether or not their own home has sold, and the addendum says a buyer who then fails to close solely because their sale did not produce the money is in default, with the seller’s remedies under the contract. Our guide to the Texas real estate contract covers those remedies, and our guide to earnest money in Texas explains what is at stake when a deposit is on the line.
Backup Offers and the TREC 11-9 Back-Up Addendum
The kick-out clause works best when a second buyer is ready. That second buyer signs a backup offer using TREC form 11-9, the Addendum for Back-Up Contract, currently effective July 1, 2026. It makes the second contract contingent on the first contract terminating, and it is binding once both parties sign, so the backup buyer delivers earnest money and any option fee as the contract requires.
Neither party has to perform under the backup contract while the first contract is still alive. If the first contract does not terminate by the date written into the addendum, the backup contract ends and the backup buyer’s earnest money is refunded. If the first contract does terminate, the seller must notify the backup buyer immediately, and the backup contract’s effective date moves to the day of that notice, which restarts deadlines such as the option period.
For a seller holding a contingent contract, a solid backup offer is leverage: it is often what triggers the kick-out notice, and it gives you a buyer in line if the first buyer cannot waive. For a buyer, sitting in the backup position on a home you love can be a smart, low-pressure move while the first deal plays out.
Risks and Rewards: Should a Seller Accept a Contingent Offer?
There is no single right answer. It depends on the offer, the buyer’s home, and how much interest your own listing is getting.
Pro: a larger pool of buyers
Many move-up buyers cannot purchase without selling. Accepting contingencies can bring in qualified families who would otherwise sit on the sidelines.
Pro: a possibly stronger price
A buyer who gets the flexibility they need may be willing to pay more or ask for fewer concessions.
Pro: you keep marketing
With the kick-out clause, you can keep showing the home and accept a back-up offer, so you are not frozen out of the market.
Con: two deals have to close
Your closing now depends on a house you do not control, its buyer, their lender and their appraisal.
Con: time and fewer showings
Some buyers searching the MLS skip homes that are already under contract, and if the contingency fails you may be back on the market weeks later.
Con: the waiting game
If the buyer's home is priced too high, your sale can drift toward the contingency date with little progress.
Before accepting, ask to see how the buyer’s home is priced and marketed, whether it is already under contract, and whether the buyer is preapproved with the lender counting on that sale. A contingent offer on a well priced home in a popular neighborhood is a very different risk than one on a home that has not been listed yet. How long similar homes are taking to sell matters too; our guide to days on market for Houston sellers explains how to read that number.
It also helps to know your own numbers. A free CMA of your Kingwood home tells you where your price sits against the market, so you can judge whether a contingent offer at a higher price is worth more than a non-contingent offer at a lower one. For investment, land or commercial property, Stacy also prepares a broker opinion of value.
For Buyers Who Must Sell First: How to Compete
If you need to sell your current home to buy the next one, a contingent offer is not your only move, and it is not always your strongest. In a busy market, sellers with several offers often favor the one without strings. These are the main ways to compete:
Sell first, then buy
Put your home on the market, close, and shop with cash in hand. Your offer is non-contingent and your budget is certain. The risk is needing somewhere to live in between.
Negotiate a rent-back
Sell your home and lease it back from your buyer for a short time using TREC's Seller's Temporary Residential Lease, form 15-7, which is for stays of no more than 90 days after closing.
Bridge the gap with financing
A bridge loan or a home equity line on your current home can fund the down payment so your offer does not depend on the sale. Ask a lender about costs and whether you qualify carrying both payments.
List with a contingency-friendly plan
If you do need the contingency, make it easy to accept: list your home first or at the same time, price it to sell, and offer a reasonable kick-out window and waiver deposit.
Get under contract before you offer
An offer backed by a home that is already under contract, with the option period behind it, is far more attractive than one on a home not yet listed.
Show the seller your file
A strong preapproval letter, your listing details and a realistic contingency date tell a seller you are organized and serious.
Your lender is a key part of this plan. Talk with them about prequalification versus preapproval and ask directly whether they will approve you without the sale. Then look at our full guide to buying and selling a home at the same time and, if your current home still has a loan on it, how selling a house with a mortgage works at closing. When you are ready to choose where you are headed next, browse our Kingwood and Houston area buyer’s guides.
How Stacy Handles Both Transactions for One Family
When a family needs to sell one home to buy another, the hardest part is coordination: two contracts, two sets of deadlines, two lenders and often two title companies, all needing to line up on the same few days. Stacy Sherman, Broker handles the listing and the purchase together, so the sale price, the contingency date, the kick-out window and the closing dates are planned as one timeline instead of two separate deals.
In practice that means pricing your current home with a real market analysis before you shop, preparing the home and listing it so it is under contract as early as possible, writing an offer on your next home that a seller can actually accept, and keeping both closings in step, including a rent-back or a same-day closing when that is what the timing needs. You get one person who sees both sides of your move.
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Get My Home ValueHome Sale Contingency FAQs
What is a home sale contingency?
It is a condition that makes a buyer’s purchase depend on selling their current home. In Texas it is usually added with TREC form 10-6, the Addendum for Sale of Other Property by Buyer.
What are the other types of contingencies in a Texas contract?
The common ones are financing (TREC’s Third Party Financing Addendum), appraisal (Property Approval in that addendum and the optional Addendum Concerning Right to Terminate Due to Lender’s Appraisal), and the option period, which Texas uses in place of an inspection contingency.
Does the buyer's home only need to be under contract?
Not under the standard Texas addendum. TREC 10-6 makes the contract contingent on the buyer receiving the proceeds from the sale, which means their sale has to close.
What is a kick-out clause?
It is the part of the addendum that lets a seller accept another written offer and then require the first buyer to waive the contingency within an agreed number of days, or the contract terminates.
Does the buyer get their earnest money back if the contingency fails?
Under TREC 10-6, if the contingency is not satisfied or waived by the contingency date, or the buyer does not waive after a kick-out notice, the contract terminates and the earnest money is refunded to the buyer.
What happens if a buyer waives the contingency and still cannot close?
The addendum says a buyer who waives and then fails to close solely because their own sale did not produce the money is in default, and the seller can pursue the remedies in the contract.
Is a contingent offer a good idea for sellers?
It can be, especially when the buyer’s home is well priced or already under contract. Know your own value first with a free home valuation so you can compare offers fairly.
Where can sellers find more guides like this?
Visit our home seller resources hub for pricing, timing and closing guides, or call Stacy at 832-445-8934.
Please note: This article is general information, not legal, tax or financial advice. Stacy Sherman, Broker is not a lawyer, CPA or lender. Talk to a Texas real estate attorney, tax professional or lender about your situation. TREC forms are summarized here for education; the signed contract and addenda control.
More Resources for Sellers and Buyers
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