Hubbard clause - should I or shouldn't I???

momtoollieMay 17, 2011

We put our house on the market a week ago and have had good interest and two offers. One was low and we declined. The other offer was very good, but the buyers wanted a Hubbard clause. We would very much like to sell to these buyers because they are the children of one of our neighbors. They are a great family and we love their parents. They own a beautiful home in another town and are prepared to immediately put it up for sale - they desperately want to buy our house. Normally I would never consider a Hubbard, but these are unusual circumstances. Should I, or shouldn't I.....

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deee_gw

Why should you take your house off the market for something that may or may not happen? You can write the contingency so you can take other offers but in reality most home buyers won't even look at a house with contingency offer. I'm all for being gracious and kind but this is really way more than a generous favor.

If they REALLY want the house they'll find a way to make it work without you assuming all the risk.

    Bookmark   May 17, 2011 at 7:41AM
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ncrealestateguy

deee is right... keep your home Active, and tell them to send you a pre approval letter the day they get under contract with thier current home. Then, it would be wise to get into a short term contingent contract with them. (30 - 45 days).

    Bookmark   May 17, 2011 at 8:38AM
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maurenemm

The wisest answer is probably NOT to do it.

Are you under any time constraints to sell? If not, then I suppose you could do it. But, if I were you, I'd want to know all about the house they have to sell like what they plan to list it at (make sure it itsn't too high). And is there a minimum price they have to get for their house so that they can afford your house? How is the market there? Do nice, well priced properties sell fast?

I'm curious...Are they looking to move in general or just want to move for your particular property? If its the latter, I can see where there are in a bind.

    Bookmark   May 17, 2011 at 9:06AM
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momtoollie

Thanks for all the responses - this really helps.

The buyers are only interested in our property because it abutts their parents backyard. It's a one of a kind situation for them.

We are building a house and our timelines are a bit flexible. The builder will speed things up if we sell quickly, or vice versa.

I'm leaning toward ruling out the Hubbard but countering with a longer window to close - as much as 6 months. We could close on the new house without the sale of this one if we had to. At least this option would shine a light at the end of the tunnel.

Do you think this is a feasible option?

    Bookmark   May 17, 2011 at 9:52AM
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sweet_tea

if you push closing out 6 months, you essentially are waiting for them to sell. What if 6 months passes and they do not sell? Then you are appoaching Thanksgiving with a home to put on the market. Then do you keep their earnest money? You probably cannot, because they would not be able to obtain a mortgage for your home, if the other doesn't sell.

Maybe their parents can buy it(your home) for them or get a bridge loan while the other home is on the market. then when the other home sells, the kids and refi in their own name. Or possiblly they can get a bridge loan without their parents.

    Bookmark   May 17, 2011 at 11:49AM
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