Buyers and sellers differ on their view of offers that are contingent on the sale of the buyer’s home. Currently in Chisago County there are only 3 listings that are sold contingent on the sale of the buyer’s home. No doubt there have been many more offers submitted that have been rejected by the sellers.
One buyer that I worked with wanted to find the perfect house before putting her home on the market as she didn’t want to sell her home until she knew she had a place to move. She was not qualified to purchase another property until she sold her home. I explained the risk involved with a contingent offer, as if the sellers accept her offer they will continue to market the property to try to find a non-contingent offer. If the sellers do receive another offer, they can bump her offer and accept the other one.
Once a contingent offer is accepted, the listing status on the MLS is changed to reflect the contingent offer. This draws the attention to savvy buyers that it is a good property which they can bump, or it can cause confusion to buyers that think the property is sold so they don’t go see it.
In order for the buyer to remove the contingency for the sale of her home, she would need an accepted purchase agreement on her home, by a pre-approved buyer, that is not contingent on anything other than financing. This could take at least two weeks to get through an inspection contingency, even if her home sells right away. This allows plenty of time for another buyer to bump her.
Knowing all of this, the buyer still wanted to submit an offer contingent on the sale of her home. The offer was for full price, as it was the first day on the market. The seller did not accept the offer because they had several other showings on the first day, and they feared if the listing was marked sold on a contingency the showings would slow down.
My advice was to put her home on the market right away, price it competitively, and hope that the home she wanted to buy would be available when her home sold. After two weeks the buyer’s home sold and she submitted a new offer for $25,000 less than her original offer.
In hindsight the seller would have been better off accepting the contingent offer as it was for full price and the buyer had a good home, that was priced to sell quickly.
An experienced agent can provide you with the best advice on contingent offers for your home.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.