How To Handle A House-Selling Contingency?

LoveInTheHouseApril 1, 2011

I imagine that when I finally do get a buyer, he is going to want a house-selling contingency. In the old days, it was no big deal because everyone was selling so fast. But nowadays it could take years for someone to sell their house. I know MY house is priced and marketed right but I don't know if my buyer's house is priced and marketed right. So I'm a little worried about giving up that control and I know I'm probably going to have to take a house-selling contingency. So how do I handle it? What kind of time limit do I give? Do I schedule the closing? How could I if things are taking so long to sell? An agent told me if I take a contingency and then another buyer comes along, I can ask my first buyer if they can perform, and if they can't, I can take the second offer. Is that true? Thanks!

Thank you for reporting this comment. Undo

The way ours worked was there was a "kick out" clause in the contract (we were the buyers in this case).

When they seller got another offer we had something like 7-10 days to get a loan, or come up with the money another way, instead of waiting for our house to sell. We responded quickly we would not.

We actually helped the seller because our offer was below asking. Not knowing what we offered, the actual buyers offered more than the asking price.

No you don't schedule closing, the buyers will after they get a contract on their house.

    Bookmark   April 2, 2011 at 8:01AM
Thank you for reporting this comment. Undo

Usually there is a clause stating that the first buyers have 48 hours to remove the contingency should you get another offer. We bought a house last year. There was already an accepted offer with the contingency that the buyers had to sell their house. When we made our offer, the first buyers had to either remove their contingency and proceed with the purchase or the sellers were free to accept our offer. The first buyers could not proceed without selling their current residence and so we were able to buy the house. You do not remove your listing when you accept a contingency offer. You continue to show it and can accept another offer under those conditions.

In our case we knew what the accepted offer from the other buyers was. We offered less and purchased the house for $15,000 less than the other offer. But we could close right away and had no contingencies in our offer.

    Bookmark   April 2, 2011 at 9:11AM
Thank you for reporting this comment. Undo

there are the situations like described above, which sound ok, but aren't the best.

are the buyers in contract on their house? otherwise in this market an offer from someone who is just putting their house on the market is worth very little b/c who knows if it will sell.

you could do what is suggested above, but that is realy assuming that your realtor assures you there aren't any negitives to that in the market, as in that showings stop etc.

    Bookmark   April 2, 2011 at 12:52PM
Thank you for reporting this comment. Undo

In this area, once a house goes under contract, contingency or not, there are very few (if any) buyers who will look at that house. There are just too many to choose that don't have the contingency. It is essentially taking the house off the market to accept a contingency offer.

My DD is going on the market in the next few days, and this is one thing we hope she talks over at length with her realtor. Tough call.

The last sale we had, the buyers were between contract and closing. Their realtor assured everyone the deal looked good. We took their contract, our only contract after several months on the market, and sweated bullets waiting for closing, which went off without a hitch. They had a clause that would have cancelled the deal had their house not closed. Took about 45 days. No one looked at our house after the contract although we had been having showings before.

    Bookmark   April 2, 2011 at 12:55PM
Thank you for reporting this comment. Undo

Okay, thanks a lot. I want to cover all my bases this time. My last buyer had a mortgage contingency. Everything was going great. The house appraised out for the money, her credit was great, she qualified for a house that cost more than mine, stable jobs, the whole bit. So I told everyone who inquired that we were under contract but were taking back-up offers. They said okay bye. Two days before closing, the buyer was declined for her mortgage because the lender didn't like it that it was a horse farm (even though they knew this from the beginning). I contacted everyone who showed an interest but they were gone. So I don't want that to happen again because I realize it's very likely someone is going to ask me for a house-selling contingency. I will make sure the lawyer puts that kick-out clause in the contract. And I won't schedule the closing till all contingencies are met. The last buyer pushed me to schedule the closing and that's partly what really messed us all up because we had to find another house to move to, schedule movers (moving to another state), oh, just a ton of stuff that caused a lot of trouble.

What would be a good time limit to give them for selling their house? You wouldn't leave it open-ended would you?

    Bookmark   April 3, 2011 at 12:04AM
Thank you for reporting this comment. Undo

Why would no one look at a home that has a contingency? Home is still for sale and no reason one cant make offer like normal. We plan to make offer on a home, and add contingency that we need to sell our home first. It's been for sale since Oct, but we have two perpective couples that want it, just need to sell their home first/have to wait couple months before can make offer.

I am sure sellers will have clause saying we have 48hrs to decide if they get another offer.

But this is only home we have liked after looking since Oct and doesn't seem to be many homes coming on market this spring.

    Bookmark   April 5, 2011 at 1:29PM
Thank you for reporting this comment. Undo

Why would no one look at a home that has a contingency?

Because there are tons of other homes on the market and people don't want to fall in love with a house that they may not get. Agents know this, and will show the other homes first.

    Bookmark   April 5, 2011 at 1:55PM
Thank you for reporting this comment. Undo

Also, I think some agents don't want to waste their time taking you to a place that's already under contract. When we first started looking for a house back in December, there was a house that we really liked. The agent said, "Oh, that's already under contract." We didn't think to say "Take us to it anyway." It sounded like it was a done deal. Well, after our own house deal fell through last month, we had to start looking again. That same house was still on so I asked the agent about it again. This time she said, "It's under contract but they're taking back-up offers." She didn't give me that information the first time. She didn't want to waste her time takng me to it I think.

For sale-by-owners have an advantage there. We are in control of the information we give out.

    Bookmark   April 5, 2011 at 11:26PM
Thank you for reporting this comment. Undo

In this market, there is no way I would accept a house selling contingency. You could be waiting for a long time, and when they do sell, their buyer may have a selling contingency. Opens the door to way too many problems. You either want the house or you don't. If people with selling contigencies were the only ones making an offer, then I guess I might feel forced into allowing it. But I would definitely keep showing the house and if I eventually got an offer without a contingency, you can guarantee the first contract would get kicked out.

    Bookmark   April 6, 2011 at 2:37PM
Thank you for reporting this comment. Undo

"But I would definitely keep showing the house and if I eventually got an offer without a contingency, you can guarantee the first contract would get kicked out."

"keep showing the house" only works if you can convince buyers to bother looking, knowing that they may have wasted their time if the first buyer waives the contingency.

The 'kick out clause' is intended to force the first buyer to move forward or the contract is void.

Few RE agents and buyers are going to even bother looking if their is already a contract.

    Bookmark   April 6, 2011 at 3:38PM
Thank you for reporting this comment. Undo

I like to think that as sellers, I will only accept a contingent offer on my house IF they already have a contract on their house. And I want details on their contract so I can be assured they have a strong buyer. I know that won't ensure the sale of my house but I certainly don't want to be waiting around for them to prep and market their home. In addition to selling our home, we will be buying a new one. And, we won't make any offers without first having a strong offer on our home.

Contingency is nerve wracking. I hope we can avoid a whole chain of contingencies. I see a lot of homes with the status: "contingent, no kick out." To me, that just screams that we're in a buyers market. (But I may be confused as to what that status really means.)

    Bookmark   April 7, 2011 at 10:29AM
Thank you for reporting this comment. Undo

not to throw something into the mix, but in general if someone has a house to sell, whether the home sale contengency is in there or not.... you have a home sale contengency.

Most people can't carry two mortgages, the banks approve your loan based upon the fact that you're removing the other mortgage. if they don't sell their house, the bank will not fund your loan.

    Bookmark   April 7, 2011 at 11:47AM
Thank you for reporting this comment. Undo

This Realtor's blog explains it very well.

He also has a great website to search for homes for sale/sold in the Maryland/DC/VA area.

Here is a link that might be useful: Franklymls Blog

    Bookmark   April 8, 2011 at 2:36AM
Thank you for reporting this comment. Undo

"And, we won't make any offers without first having a strong offer on our home."

Maurenemm, that's how we always do it. We don't even look until we are in a firm contract with a buyer on our place. But you can't count on anything nowadays! Listen to what happened to us. We made a deal with a buyer who was pre-approved and did not have a house to sell. I was in contact with her bank. She qualified for a house that cost more than mine, her credit was excellent, she and her husband had good stable jobs, and then the house passed the appraisal with flying colors. So we drove to our new state and had a week to find a new house and make a deal. At that point, we figured it was safe. Not! Two days before closing, our buyer couldn't get the mortgage because the bank didn't like it that our property is a horse farm. Though they knew this from the very beginning. In fact, I called them and stressed it. I lost the house I was trying to get in the other state. THAT lady who was under financial difficulities really got hurt. So whenever I find a new buyer, I'm going to be scared to make a deal on another house! And that's why I'm worried about handling contingencies on this one. So much can go wrong nowadays.

    Bookmark   April 10, 2011 at 12:03AM
Sign Up to comment
More Discussions
Off market for 6 days, why? ncrealestateguy?
Hello, long time lurker, first time poster. I hope...
Hall bathroom with claw foot tub, garden view but no shower.
We have a 4 bd, 3 bath house that I am getting ready...
Specific real estate agent required by divorce decree
Hi real estate agents, does anyone know if it is legal...
After months of preparation, house is now listed
This is such a big deal for us, we have been planning...
what do you do with mail that comes for previous occupants?
I always get mail that is meant for previous occupants...
Sponsored Products
Mirror Ball Stand by Tom Dixon
$275.00 | Lumens
Nostalgia Electrics Coca-Cola Series 48-inch Old Fashioned Movie Time Popcorn Ca
Mia Bronze Three-Light Bath Fixture with Blue Cloud Glass
$391.50 | Bellacor
Lightolier 4" Low Voltage Slot Aperture Recessed Light Trim
$49.99 | Lamps Plus
30 Inch Bathroom Vanity Set
Here's a Toast to Breakfast Fun Set
$44.99 | Dot & Bo
Thermostatic Shower Panel Tower System Body Jets
Hudson Reed
Modern Indoor/Outdoor Artistic Weavers Rugs John Red 2 ft. 6 in. x 8 ft. Runner
Home Depot
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™