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As a seller I would never entertain any contingency offer that was based upon the sale of a potential buyer's home, even if it contained that 72 hour right of refusal that is being discussed in another thread. I could never see any actual benefit to a seller, no pros, only cons, such as:
1) Home being labeled contingent and impression of off the market to both the brokers and agents as well as the public ( limiting buyer pool, that would not want to waste the time looking at a house under contract)
2) Valuable time being lost while potential buyer tries to sell their home and possibly if ever.
3) Contract price and maybe other details revealed, even IF someone else/another buyer did indeed look and want to buy.
4) Agents/brokers not wanting to tamper with a potential sold when another contract could be made on another house.
5) It appears to only work in favor of a buyer, who I agree will be more motivated to sell his/her own home once they have "found" one; but wouldn't they be EVEN more motivated if they thought that the house they wanted to place under contract was still "actively" on the market? I know technically it is, but it does not appear so, to me.
6) I don't think it locks in any buyer that truly wanted or could purchase the home. If it is there when the buyer can do so without a contingency then it is...if it isn't then the seller sold it.
The clause and that type of contingency offer just doesn't seem to do anything positive for the seller. Possibly beneficial to the buyer and a RE agent/broker, but, why the seller? It actually appears detrimental to a seller in my viewpoint.
Last edited by corpgypsy; 05-09-2016 at 10:31 AM..
I am not attempting to be adversarial, bless your heart! ( I am not currently on the market, but have been, NUMEROUS times in the past) I genuinely do not see any benefit to a seller. Could you please explain one as I note you are in the business. An offer is an offer, but as a seller, I am after a closing contract.
I am not attempting to be adversarial, bless your heart! ( I am not currently on the market, but have been, NUMEROUS times in the past) I genuinely do not see any benefit to a seller. Could you please explain one as I note you are in the business. An offer is an offer, but as a seller, I am after a closing contract.
this isnt exactly rocket science and there is no need for debate. everyone knows the reasons why someone would accept an offer with a contingency. you can pretend not to all that you like.
No I genuinely do not see a reason for accepting a contingency like that...seriously. I really am asking why a seller would accept it. Perhaps I am the ONLY person who does not know this, as you suggest, but why does the practice exist? A serious question, as over the past 45 years of owning homes and selling homes and relocating across the country I have been encouraged to accept such offers/contracts and I could never understand why, nor could anyone explain it to me.
No I genuinely do not see a reason for accepting a contingency like that...seriously. I really am asking why a seller would accept it. Perhaps I am the ONLY person who does not know this, as you suggest, but why does the practice exist? A serious question, as over the past 45 years of owning homes and selling homes and relocating across the country I have been encouraged to accept such offers/contracts and I could never understand why, nor could anyone explain it to me.
Because your home is going to take some time to sell (as in, it's not "hot" in your market) and the buyers who want your home may have a home to sell that is "hot" in their market. Sooo... why turn away a buyer when you already know your house won't fly off the shelves?
There. That's a good reason for accepting a contingency.
The reality is that not all buyers can buy until they sell. If you have a home in a market where homes like yours have multiple offers the first day/weekend/week they list, then you absolutely shouldn't entertain a contingency if you have other buyers who are not encumbered.
But... if your house is in a slower-moving market segment and you get an offer after a week or two and it is with a contingency, maybe it's worth considering.
Why is that so odd?
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Because sometimes the only buyers are people who need such contingencies and sometimes the buyers who don't want such a contingencies make lower offers than people who do.
The benefit is that the buyer is psychologically locked in to buying your home. He will begin to invest in the purchase with the inspection and appraisal. If you have a kick-out clause, you can still sell the house out from under this first guy is someone comes along with a full price offer.
So in a buyer's market (houses are slow to sell) it is a reasonable accommodation. In a seller's market (houses are selling quickly) it would probably be upset by a new buyer pretty quickly.
3) Contract price and maybe other details revealed, even IF someone else/another buyer did indeed look and want to buy.
Why do you think this happened? A contract price is confidential until closing and the sale is reported. Under contract does not mean it's sold yet.
As for a seller accepting a contingency, in my market, it typically doesn't happen unless the buyer already has a contract on their home and that buyer has already done inspections so there is less of a risk of the sale not going thru.
It really depends on how the market is. Someone already suggested taking one of the other offers instead. I think the point there is, is there a lot of activity on the house? In what they call a sellers market where you have multiple offers to choose from? If so, then maybe you can do better and you know it. Sellers accept this sometimes rather wait a while for another offer. It isn't a plus, because of the possible domino affect where the whole thing could fall apart. It is a compromise in order to try to sell the house.
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