What does the contingency of selling an existing home require from the buyer?

The contingency of selling an existing home requires that the buyer sell their current home before being obligated to purchase a new one. This provision protects the buyer from having to finance two properties simultaneously and ensures that they have the liquidity from the sale of their existing home to fund the purchase of the new one. It is particularly relevant in situations where the buyer does not have sufficient financial resources or is concerned about carrying two mortgage payments at the same time.

The other options reflect scenarios that do not align with the typical requirement of a sale contingency. Buying a new home before selling the current one would place financial strain on the buyer. Being exempt from inspections does not pertain to the sale condition and retaining ownership of both properties contradicts the essence of the contingency, as it implies that the buyer has successfully completed their sale. Thus, the correct understanding of the contingency focuses on the need to first complete the sale of the existing home before moving forward with the new purchase.