Should your Phoenix offer be contingent or active in today's buyer's market?

In today's Phoenix buyer's market, your offer strategy matters more than ever. A contingent offer (one that depends on selling your current home or getting financing approval) used to be a tough sell. Now, with more inventory and lower competition, contingencies are back on the table. The question is: when should you use one, and when should you go active?

What's the difference between contingent and active offers?

An active offer has no contingencies tied to external events. You're ready to close on the home as-is, with financing and funds lined up. The seller gets certainty.

A contingent offer depends on one or more conditions. The most common in the Phoenix market are:

• Sale contingency: your offer is contingent on selling your current home first.
• Financing contingency: your offer depends on loan approval (this is standard and nearly universal).
• Inspection or appraisal contingency: you retain the right to back out or renegotiate if issues arise.

In a seller's market, contingencies kill offers. In a buyer's market, they become negotiable.

Why the Phoenix market has shifted

The Cromford Multiple Listing Service data shows a Cumulative Market Index (CMI) of 79.7 for the greater Phoenix area, firmly in buyer's-market territory. A CMI below 100 means more homes on the market than typical. Sellers are motivated. Days-on-market have extended. Price reductions are more common.

This shift means sellers are less likely to reject your offer outright because it includes a sale contingency. They may still prefer active offers, but they'll negotiate on contingencies if your price is competitive and your terms are reasonable.

When to make your offer contingent

A contingent offer makes sense if:

• You currently own a home and need the proceeds to close on the new one.
• Your down payment depends on that sale.
• You want to preserve your right to walk away or renegotiate if inspections reveal major issues.
• You're not pre-approved yet and need time to finalize financing.

In a buyer's market, sellers are more likely to accept a contingent offer if your price is fair and you offer a reasonable timeline. A sale contingency might add 30 to 60 days to the close date, and in today's softer market, that's often acceptable.

When to go active (no contingencies)

An active offer works best if:

• You're a cash buyer or fully pre-approved with proof of funds.
• You've already sold your current home.
• You don't need to inspect or have already done your due diligence.
• You're bidding on a highly desirable property that may draw multiple offers.

Even in a buyer's market, a pristine home in a prime area (say, a move-in-ready Scottsdale residence near shopping or a newer Chandler property with low HOA fees) may attract competing offers. Active offers stand out.

The real negotiation: price vs. contingencies

Here's the key insight: in a buyer's market, you can often trade price for contingencies. You don't have to offer the lowest price to win; you can offer a fair price with reasonable contingencies instead.

Example: You're looking at a $450,000 home in Gilbert. In a hot seller's market, you might have to offer $480,000 with no contingencies to compete. In today's buyer's market, you could offer $460,000 with a sale contingency and a standard inspection period, and the seller might accept because they value the certainty of a fair price over an aggressive non-contingent offer that might fall through.

Your real estate agent can help you read the seller's motivation. If they've owned the home for years and are relocating, they'll likely accept contingencies. If they're an investor looking to flip quickly, they'll push back.

Key terms to protect yourself

If you go contingent, make sure your offer includes:

• A clear timeline for your home sale (or financing approval).
• An inspection period (usually 7 to 10 days in Arizona).
• An appraisal contingency, so you're not paying more than the home is worth.
• A kick-out clause, which lets the seller continue showing the home and accept a backup offer — but you get a chance to remove your contingency and match it.

The kick-out clause is especially valuable in a buyer's market. It gives the seller some flexibility while protecting your right to walk away if your home doesn't sell.

How buyer-agent commission fits in

Since the August 2024 NAR settlement, buyer-agent commission is negotiable and no longer automatically paid by the seller or advertised on the MLS. This doesn't directly change contingency strategy, but it does mean your offer negotiation is more complex. Discuss commission terms separately from your purchase offer, and clarify them in writing before you sign.

People also ask

Can a seller reject a contingent offer in a buyer's market?

Yes. Even in a buyer's market, a seller can reject contingencies if they prefer certainty. But in today's Phoenix market, they're less likely to walk away from a fair-priced contingent offer if competing offers are weak or non-existent. The key is making your contingencies reasonable and your price competitive.

How long does a sale contingency give you to sell your current home?

That's negotiable and depends on your contract language. A typical Phoenix offer might give you 30 to 60 days. In a soft market, you may negotiate for 90 days. Discuss your home's likely time-to-sell with your agent and build that into your offer deadline.

What happens if your current home doesn't sell before the offer deadline?

You lose your earnest money deposit (unless you negotiated an extension or the seller agrees to waive the contingency in writing). This is why you must be realistic about your sale timeline. If your home is listed and showing, you're in a better position. If you haven't listed yet, a long sale contingency is riskier.

Bottom line

In Phoenix's current buyer's market (CMI 79.7), contingent offers are viable again. You can compete with fair pricing and reasonable contingencies instead of overpaying and waiving protection. The right strategy depends on your situation: do you own a home, are you fully pre-approved, and how competitive is the property you're targeting?

Work with a Phoenix-area agent who understands the current market dynamics and can advise you on whether to go contingent or active based on your needs and budget. The difference in your offer strategy can save you thousands and protect you from a bad deal.

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