Don’t write contingent on Sale Offers!
I rarely write an offer on a home if my buyers have a home to sell and their home is not under contract. Don’t do it. That kind of situation puts you the buyer in the worst negotiating position. Why? If the seller is not sure if the contract will ever close they are very unwilling to come down on price or make other adjustments, they just have nothing to lose.
Here’s the Downside
Here’s why. The seller will continue to market the house, it will still show active on most realtor web sites and in the MLS it will be marked, continue to show and first right of refusal. The first right means that if another offer comes in and is acceptable to the seller, then the buyer who has the first right must release their contingent on sale clause or withdraw from the contract. Not too many people can own two homes at once, so generally the buyer loses the home they wanted and has to start over.
This is pretty common sense but now let’s look at the negatives to the buyer. The buyer is locked in the deal just like any other ordinary contract. So let’s say we have written the contract for a 90 day period while the buyer is trying to sell their home. Remember the seller is still actively marketing their home…..the buyer has probably paid close to full price.
Disadvantage for the Buyer
What if on the 47th. day a home get’s listed that the buyer likes more than the one they have under contract? What if they absolutely love it and want out of their current contract. Even if the seller will release, the buyer may not get their escrow money back. Again folks you are at a severe advantage. Don’t do it.
Now if your house is under contract, well that’s a story for another day!
