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If things look good, I would do it with a bump clause. You do need to be aware of MLS rules. They are slightly different everywhere. Out here a bump clause gets designated as Active-ROR (Right of Refusal), so it will still show up on Realtor.com and other websites. Some buyers will screen it out though as they may not want to bump someone else out of the way.
This is really up to your agent to market the home to continue to try and pull buyers in.
Hi all--I started the controversial "realtor behavior" post awhile ago; i now have an update and another request for an opinion. as some of you may recall, my house was placed on the mkt in early feb., we live overseas, we currently have tenants living there who are uncooperative but moving out at the end of march. it is then our intention to clean it and stage it (although realtor will allow only minimal staging, but that's the subject of another post).
my realtor just emailed me and asked me if we would be willing to accept a contract that is contingent upon the sale of another home. she didn't say whether the contract would be for the full asking price. she doesn't know anything about the house, only that it is in arlington, va and is a detached home, but she said taht she and her RE partner would go look at it. she asked that i give her my answer asap. i plan to get more info, but wanted to post here first.
i assume it would depend on the marketability and condition of the other house, and i want to know how long it has been on the mkt, etc. other than that, i'm not sure what to think as i have never been in this situation before.
Can anyone give me the pros and cons of accepting a contract that would be contingent on the sale of another home in this market or can anyone share their thoughts in general?
thanks very much in advance.
Typically, contingent contracts have a limited life to them, such as 30 days. I know ours was that way.
The other thing is that a contingent contract does not prohibit you from continuing to market your house. Because if somebody comes along with a non-contingent contract or even a better offer that is also contingent, then you have a right to cancel the original offer.
In fact, if somebody comes along later and loves your house, a contingent contract works in your favor by adding greater urgency to their offer.
So I would take the offer if it's a satisfactory price. After all, you know what they say about a bird in the hand...
Thanks everyone very much! these responses were very helpful, as many things i hadn't thought of were pointed out. it sounds like the consensus is to accept the contingency but make sure that i am protected in various ways such as a bump clause and make sure it is not shown as contract pending on the mls, etc. i'll go over each of these responses again before i talk to my realtor.
thanks again, and pls feel free to continue commenting!
Sorry to hijack the thread but I'm in the other shoe (but slightly better).
I have sold my property with no contingency. Closing date is late April. I'll be house hunting in S. Florida next week and my attorney has advised me to put contingency on closing clause in my offer. I'll submit the executed contract on my home with the offer to convince the seller.
Will I be subject to the bump clause, 30 day to remove contingency limit? Since the housing market is so weak in Florida, I was going for a low ball offer. But will this contingency hurt my negotiation power?
Sorry to hijack the thread but I'm in the other shoe (but slightly better).
I have sold my property with no contingency. Closing date is late April. I'll be house hunting in S. Florida next week and my attorney has advised me to put contingency on closing clause in my offer. I'll submit the executed contract on my home with the offer to convince the seller.
Will I be subject to the bump clause, 30 day to remove contingency limit? Since the housing market is so weak in Florida, I was going for a low ball offer. But will this contingency hurt my negotiation power?
You'll probably be subject to a 5 to 7 days to remove the contingency or cancel. That's the way I write it up here in AZ. I don't want my seller tied up for 30 days if a strong no-contingency buyer comes along.
Any contingency (other than the normal appraisal and inspection contingencies) will hurt your negotiation power. What helps the negotiation power is pre-approval (or cash) a minimum 20% down, a 1% earnest money with the stipulation to add another 1% earnest money when the appraisal and inspection contingencies are removed.
You'll probably be subject to a 5 to 7 days to remove the contingency or cancel. That's the way I write it up here in AZ. I don't want my seller tied up for 30 days if a strong no-contingency buyer comes along.
Any contingency (other than the normal appraisal and inspection contingencies) will hurt your negotiation power. What helps the negotiation power is pre-approval (or cash) a minimum 20% down, a 1% earnest money with the stipulation to add another 1% earnest money when the appraisal and inspection contingencies are removed.
Captain Bill,
I am pre-approved with enough cash for 20% downpay, closing cost and deposit. 5-7 days will not change anything because I've already sold my home and waiting it to close on April 29th.
Is it 5-7 days from the executed offer or is it 5-7 days from a competing offer after signed contract? The former doesn't do any good to me.
I am pre-approved with enough cash for 20% downpay, closing cost and deposit. 5-7 days will not change anything because I've already sold my home and waiting it to close on April 29th.
Is it 5-7 days from the executed offer or is it 5-7 days from a competing offer after signed contract? The former doesn't do any good to me.
The seller would accept an offer from a new buyer subject to your offer being canceled. At that time the seller would provide you with a written notice to remove the sale contingency or cancel the contract within the given time period. (That 5-7 days is negotiable when you enter into the contract.)
If you remove the contingency, then you are obligated to continue the purchase, and if you back out before closing you would lose your earnest money.
If you cancel, then the seller would remove the contingency on the second buyer and sell the home to them.
In your case you will be in a good negotiating position. Along with the offer, submit documents that will show how far along you are in your sale.
Or better yet, if you're confident that your home will close, make the offer without a contingency. That is the strongest position. If there something in the inspection you won't accept, you can cancel the contract, and if you can't get financial approval, you can cancel. Both will allow you to get your earnest money back. It's possible that your lender will not give you a loan for the new home until your sale closes, so you would be pretty safe.
In this case, because there would be the possibility that you would not be able to close on the new property, your agent may need to disclose this to the seller. But that shouldn't prevent the seller from accepting the offer. It's just a matter of full up front disclosure on your part.
Or wait until you have closed. I have seen so many things go wrong before closing from small issues to big issues, but still delayed the closing. Since you are going to look in S-Florida and the market is weak, why not play safe and wait until you are sure or try and see if a seller will take your offer with the contingency since many sellers have no other offers any way. So you shouldn't be in a bad situation since you want to buy and not sell. Hope your closing will go smooth and don't get discouraged by people telling you that you have to remove your contingency just to be able to buy. Many sellers are happy to take your offer but will have the clausule in their contract IF another buyers makes an offer. How big is the change of getting 2 offers in todays market other than on a cheap short sale or foreclosure. In the worst case you have to back out of the contract and look for another deal which might be even better. I always say" things happen for a reason". Good Luck.
You can accept an Conting offer on your home (TX) if you get another offer that is better you go back to the other offer and they can either waive the conting and put more earnest money down or teminate the contract.
There are a million things to consider....however..I sure wouldn't pull my home off the market to see if someone else has any luck selling theirs especially in this climate of excess supply.
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