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Accepting Offer Contingent on Sale

Posted by 49thparallel (My Page) on
Fri, Feb 15, 13 at 23:54

In the process of selling my home and may be receiving an offer contingent on the selling of the buyers home. Our house has been listed for several months and we're starting to average a couple showings a week. Normally, I would probably not consider such an offer but the buyer's home is under contract and will soon be inspected. If I decide to accept the offer with the contingency, I would probably want a "kick out" clause but the house would be listed as "under contract" and probably avoided by other prospective buyers. I would appreciate any well informed opinions. Thanks in advance.

Follow-Up Postings:

RE: Accepting Offer Contingent on Sale

This is basically our plan: when our house goes under contract, start shopping for one in our new town, and offer contingent upon closing. As a buyer I would expect to provide details about the timing on our closing, the financial situation of the buyers, etc. to prove the seriousness of the impending transaction and thus likelihood of reaching a close.

I would find it reasonable to be asked for any of the above. And I'd be happy to share progress info along the way ("inspection is done, we've agreed to fix 2 things," "bank gave final approvals and closing is scheduled for next Tuesday," etc.) to maintain confidence.

RE: Accepting Offer Contingent on Sale

It increases the risk to the seller.

Accepting a contingent contract depends on the market in your area (average days on market for starters), your risk tolerance, and even how much money the buyer has available.

How far can they proceed in the purchase without a sale of their present property?
Can they qualify and carry two mortgages? (even temporarily).
Obtain a bridge loan?, etc.
How solid are their financials?

RE: Accepting Offer Contingent on Sale

The answer here can vary a lot. It sounds like the MLS in you area says "under contract" without differentiating between houses with a sales contingency and those without a sales contingency. The MLS I previously belonged to listed those with a sales contingency as "pending" with the number of hours allowed in the kickout clause immediately after it. Agents were not as reluctant to show houses with a kickout clause. I helped buyers purchase several homes that had kickout clauses. Unfortunately this doesn't seem to apply in your case. Ask your agent though if the MLS has a way to indicated a contract with a kickout clause.

You need to look at where your house is in the range of buyers. Is it a first time buyer price, in the middle or near the top of prices? If it's a first time buyer price, I would walk away. If it's at the top, or even the middle of market prices, you may have to accept the fact that anyone offering on your home is likely to have a contingency for a home sale.

The advice in the above post is excellent. Have all the facts and go forward from there.

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