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Old 10-12-2007, 07:50 AM
 
Location: Ct Shoreline
369 posts, read 1,954,850 times
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In CA, and I presume other states, when you make an offer on a house, you can do so with the contingency that you need to sell your own residence first. Sellers can obviously accept that contingency or not. In CT where I am moving, I understand that this is called a Hubble Agreement (pls. correct me if I am wrong.) Can anyone tell me why we would be counseled against putting this in an offer? Our agent has said that in his opinion, it will decrease our ability to negotiate on price. There are other factors of this type of agreement that I am unfamiliar with, and I was hoping that someone would be able to clear up the benefit vs burden of using one...Hate to be so clueless - thanks in advance.
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Old 10-12-2007, 08:17 AM
 
Location: Virginia Beach, VA
2,124 posts, read 8,813,290 times
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Regardless of what it is called, it is a contingent contract, and you do lose some negotiating power. You are not a Ready, Willing and ABLE buyer. You are ready, you are willing, but you aren't able to actually make the purchase until something else happens. So, to get a seller to accept this contingency, you have to offer up something else, otherwise they should just leave their home on the market and see what happens.

think about it, when a seller accepts a contingent contract, he is almost taking his house off the market. It won't be shown as much and he is hoping your home will sell.

Does that make sense?

Shelly
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Old 10-12-2007, 10:30 AM
 
Location: Ct Shoreline
369 posts, read 1,954,850 times
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It makes perfect sense, of course. It just seems to me though, in CA, it is not such a big deal. I got the feeling that in CT, it was looked at with more biased view. I am also wondering if, as a seller, my house had been on the market for 5 months with no offer that I would be more likely to accept this type of contingency than not? As far as taking your house off the market with a Hubble, is it not the case that it can still be shown, and if a better offer is received the original buyer has 42 hours to seal the deal?

I guess I am fishing around desperately because I do not want anyone to buy "my" house! : ) I have to wait until 10/31 for my escrow to close, and a few other things to come together. I was hoping that a Hubble would work in my favor.
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Old 10-12-2007, 11:26 AM
 
Location: Greenville County, SC
275 posts, read 1,756,094 times
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I think there is a big difference in the contingency when your home is still up for sale versus a sale pending with escrow closing in less than 3 weeks.

In the first case, the seller has no idea how long it may take to sell your home. For all they know, it may take a year!

In the second case, the seller knows the escrow on your home is scheduled to close soon and the escrow length for their home can be determined based on this info.

In this instance, if I were the seller, I would want my realtor to get the details of your pending sale prior to offer acceptance so we could try to determine if your pending sale was at risk or on track.
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Old 10-12-2007, 12:30 PM
 
Location: Virginia Beach, VA
2,124 posts, read 8,813,290 times
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I can't imagine it not being part of the negotiation in CA or anywhere in the country. But regardless, if you want "your" home, you need to know going into the negotiation you won't have the same negotiating power as if you were non-contingent.

shelly
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Old 10-13-2007, 07:29 AM
 
Location: Palm Coast, Fl
2,249 posts, read 8,870,207 times
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Quote:
Originally Posted by dougnaie View Post
It makes perfect sense, of course. It just seems to me though, in CA, it is not such a big deal. I got the feeling that in CT, it was looked at with more biased view. I am also wondering if, as a seller, my house had been on the market for 5 months with no offer that I would be more likely to accept this type of contingency than not? As far as taking your house off the market with a Hubble, is it not the case that it can still be shown, and if a better offer is received the original buyer has 42 hours to seal the deal?

I guess I am fishing around desperately because I do not want anyone to buy "my" house! : ) I have to wait until 10/31 for my escrow to close, and a few other things to come together. I was hoping that a Hubble would work in my favor.
Oh, for heavens sake! You are closing in a couple of weeks? Tell your agent to present your offer with the contingency of you closing escrow on your present home. Offer to produce the contract of sale on your own property if they would like to see and verify the information they are being told. And go in with the same type of offer you would if you could close tomorrow. It's nice that sales associates think they know what the sellers answer will be but they don't. Only the seller knows. And no one is going to find out what their answer is if the offer is never made! With a 'kick out' clause attached, which is, should another offer on the house come in that they would like to accept, you would have a certain period of time to remove the contingency or step aside, it's very likely the offer would be taken seriously.
To answer your question about it still being able to be shown, yes, that is true. But with so much inventory on the market, I know myself, I don't even bother unless it's got something REALLY special about it and there isn't another one like it out there.
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Old 10-13-2007, 08:06 AM
 
Location: Virginia Beach, VA
2,124 posts, read 8,813,290 times
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Palm is correct. I obviously didn't read everything carefully before opening my mouth, and writing : )

If your home is under contract, and all contingencies have been removed and you are closing 10/31... for heavens sake you are a pretty golden buyer!!! you can have them write in contingent upon settlement of of your home. but if your mortgage is already contingent on that, and if the contract reads that you must have a mortgage, that contingency is taken care of with the mortgage.

Tell your agent to buck up and present your offer properly!!!! and negotiate as if your home was settled.

Shelly
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Old 10-13-2007, 08:41 AM
 
Location: Ct Shoreline
369 posts, read 1,954,850 times
Reputation: 299
Default Clarification..

It is true that one house closes 10/31. That house would give us a great down payment. The problem is that the other house, the one I actually live in, will not go on the market until 11/1. We needed to sell them sequentially as opposed to concurrently. It is this house that will be the deal breaker. According to my husband, we need to sell it so we do not have 2 full mortgages and send him to the hospital with a stroke! Currently, but not for long, we have a mortgage and a half as we share ownership of the house in escrow with my sister. I am trying to do everything to ensure the quick sale my house, but still, I presume it will take a while given the nature of our current market.

I am interested in the realtor perspective that a home with a Hubble is not as likely to be shown. That helps a little bit. In the end, it will either work out or not, and of course I realize that. I think because we are relocating such a long distance, and because I will be leaving behind 42 years worth of living in the same place, I am fixated on getting the house I want as sort of a carrot at the end of the stick...obviously, there are other houses should this one be sold before I can pull it together.

Thanks for the insights.
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Old 10-13-2007, 08:44 AM
 
Location: Virginia Beach, VA
2,124 posts, read 8,813,290 times
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AH!! then you really are a contingent buyer.. yep, you lose some negotiating power as stated before. But the worst you will hear is no. Put your offer together and see what you can do.

Shelly
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Old 10-14-2007, 12:56 AM
 
575 posts, read 1,772,774 times
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We accepted a contingency once; but first we had our realtor thoroughly check out the prospective buyers' house, which was just across town.
They were move up buyers, their house was a nice starter, it was priced right, and the market was fairly active. Our realtor was confident it would sell quickly.
Hmmm...
Their realtor also told us, supposedly in confidence, that they loved our house, didn't want to lose it under any circumstances, and that they could and would remove the contingency and proceed with the purchase if that became necessary.
Hmmm again...

As soon as we accepted their offer our showings came to a screeching halt, their house sat and sat, and we all waited. No Fun!

Luckily for us sales in our neighborhood started to really take off, we finally got a couple of showings, and another offer (much better $$$ ) The contingency folks immediately backed out. So much for their realtors' whispered confidences.

Personally I think the long distance thing could be tough in your situation, especially since CA tends to get mentioned in every news story about declining prices and a saturated market.
Enough to make anyone skittish IMO


Good Luck to you, I hope everything works out for the best.
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