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Are You a Ready, Willing and Able Buyer?

I had a client that was very interested in purchasing a property and wanted to go out and start shopping right away. "These are all the things that the house must have.... here is what I am willing to pay.... I have excellent credit so that will not be a problem... I will have to sell my house, but I want to find a suitable replacement first."

Well, you might be ready, and almost willing, but you are not quite able at this point. That is, not without risk.

This is still a buyer's market, but that is changing. Especially if you are looking in a price range where you are in direct competition with numerous buyers that do not have a house to sell first. If you find a property and you want to make an offer, you will have to make it with a home sale contingency. With a home sale contingency, the seller is going to ask if your house is under contract with a buyer, and will assume that it is at least listed for sale.

If they find out you do not even have your house up for sale (and they most likely will), they may turn down your offer outright and consider that you are not a serious buyer. If you think you can make a low offer when you have a house to sell, you might as well save yourself the effort. However, in the event your offer is accepted, the seller will most likely include a 48 hour first right of refusal clause. The seller will continue to market the property for sale with a disclosure that it has an offer pending with a home sale contingency. Be aware, this leaves a window of opportunity for another buyer (which I will mention later).

Now what? You love the house and do not want to see someone else purchase it so you are faced with finding a buyer for your home really fast. How do you sell a house really fast in this market? You have to price it very aggressively. Even then, it does not guarantee that you will sell your house fast. Not to mention that being in a position where you have to sell quickly will make you much more susceptible to accepting a lower offer. What did that just cost you? Oh, and what about that buyer that makes an offer to purchase your house, but has a house to sell first. Do you want to accept the offer with a 48 hour first right of refusal? Not really.

Say it isn't so, someone came forward and is able to buy the property you have an option to purchase? They can if they have like (or better) terms. You are now forced with a decision. Either remove your home sale contingency and purchase the property, or forfeit the house which will then be sold to the other buyer. That hurts, you just lost the house you really wanted. Now you have to start all over again.

A better solution, would be to list your house for sale now. If you are afraid that you might not be able to find a suitable replacement, then disclose that in your listing and make your sale contingent upon finding suitable housing. It is not difficult, and will give you some peace of mind.

You will be perceived as a serious buyer when you start shopping for your replacement home. Any favorable action that you can take toward improving your ability to purchase will bring you closer to a successful outcome. It will also save you money. Call your Realtor today and ask for more details.

“Call on Judy at The Green Company”

Website: greencos.com
Email: CallonJudy@comcast.net
Office: (508) 209-5000

Posted by Judy Jennings - The Green Company at The Pinehills, Plymouth MA on 06/10/2009 11:53 AM

Comments (49)

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Originally posted at: : Are You a Ready, Willing and Able Buyer?

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49 Comments on Are You a Ready, Willing and Able Buyer?

JUN

2009

It used to be called, putting the cart before the horse. To be ready and willing is one thing, to be able is another. Figuring the timeline of selling ones own house can be difficult at best, so few can pull this off without glitches.

Judy,

Buyers should be looking to have their home, if they have one to sell, on the market while they are looking to buy a new one. That contingency can be a real problem if not. Very good points ma'am.

Judy, great post, couldn't have said it better! A good realtor would advise their buyer to get that house right on the market, price it aggressively and start a slow search for a home.

Hi Gail - Yes, putting the cart before the horse is an appropriate analogy. I understand that many people have a house to sell before they can buy another, but going about it this way is a recipe for disaster. There is an easier way if handled appropriately.

Don - Now, if the buyer has a signed purchase and sales for their home and makes an offer to purchase, their negotiating power increases and the likelihood of it closing rises significantly. That would be a much better scenario.

Andrea - There are many good Realtor's out there that will offer sound advice to their clients. As long as home buyers/sellers make educated decisions, they will most likely have a favorable outcome.

Amen, get the house ready to go so you can go when you are ready.

Shelton

oh how I use this phrase all the time. I had a seller that didn't want to list their home until they found something they both (wife & husband) agreed on. What's the point, by the time you get your home listed, and offer comes in on it - the home you both agreed on is probably long gone. Especially when you have sellers that want to list HIGHER - so they have room to negotiate!

Well said. This blog would be an excellent handout for those home owners who believe that finding the right home is the most difficult part of the trade up process. The ready, willing and able part is a little like a three legged stool - if one leg breaks the stool (transaction) falls.

Good job.

Judy, look who got a gold star! Just wanted to say congratulations, well deserved!

This is a bingo. Most buyers understand (that I have seen) but there are still those who think their contingencies will not disadvantage them. They will.

Prior to the sellers becoming 'buyers' they should, indeed, put their place up for sale. I do not represent sellers -- it's been buyers exclusively for many, many moons -- but what I see in the listing of houses for sale is: Sellers to find suitable property as a contingency to close.

In other words, sellers will have their home under contract to purchase, but their buyers know that the sellers have to find another place to call home ... so the buyers of the sellers home have to accommdate, and perhaps be very flexible on the close date, etc.

Shelton - Yes, list and then look. Your chances are much better.

Johanna - The crazy part was this buyer did not believe me and will waste her time and another agent. Oh well, you can't help them all.

Raymond - Three legged stool that's a good one. Then after jumping though the hoops, they will still blame you if it falls apart

Andrea - You made my day letting me know that I got a gold star. OH HAPPY DAY!

Candice - It certainly does. If they do not understand in the beginning, they may learn the hard way.

Carla - Sellers do not always understand that they have that option. We all do our best to educate and help them transition to the next home.

Judy, I would want to see that the buyer is in contract with their house and know their buyers are fully qualified before I would be comfortable guiding my clients to enter into a contract contingent upon another sale. As long as contingent buyers are offering on a home that doesn't have multiple offers, there might be a good chance they would be accepted. However, in this market all the well-priced updated homes in good locations are being snapped up with a lot of competition. But then again, nothing is easy anymore, is it?

Judy, any kind of contingency by the Seller in buyers markets make that home less attractive in the market so I would be careful with that approach. Same thing goes with contingencies by the buyers, as there are other buyers without that problem.

I agree with Gary. Many buyers see the "needs to find a suitable replacement property" and move on. I would rather see "seller needs to rent back for 30 days" or something definite like that. I have heard of sellers backing out of contracts based on the "not finding a suitable replacement property" clause.

This was very well written post and I have reblogged it. I can't tell you how many sellers I've counseled when they say "I want to buy a new home" and I remind them "you'll have to sell first" otherwise "it just won't work" the way they want it to...

Great article, Judy!

Judy, well said! Homeowners wanting to move up, or downsize, need to get their present home on the market before they even start to look for the new one.

Judy - I love this article and think all home sellers should read it! Plus, by educating the sellers on this subject we can spend our precious time shopping with serious "almost homeless" sellers/buyers.

where we are most sellers are not accepting a sale of home contingency.. so that would not even fly... ;)

Cheryl - The first thing I would ask a buyer submitting an offer with a home sale contingency is whether or not it was currently listed with a Realtor (along with many other questions). If not, it is very unlikely to be accepted by my seller.

Gary - I agree and prefer to not have contingencies on either side. Each situation must be evaluated and all of the pros and cons should be discussed thoroughly. Some contingencies are easier to overcome than others.

Melina - I understand where you and Gary are coming from and agree that "needs to find a suitable replacement property" is not an ideal selling approach. This would be something that would need to be completely discussed and approached with full consideration of the potential risk for all parties involved, seller or buyer.

I agree with Gary and Melina . . . too! It doesn't bother me about what the seller has written, because I'm mindful they might need to find a place to stay. I would never pass on a home if it met other wants/need of my client. I would want to get the fine points tuned prior, however, but if the property is a good match and fit . . . I'd show it, and have done so, even with the additional "need to find a home" provision of sellers. I totally get that! I do like Melina's "30 day rent back" and that's why the listing sheets in the RMLS have a data entry field for "Poss" (Possession) . . . shouldn't be an issue.

Judy --- Hey, girl --- I'm so proud of you --- don't you just love that "little gold star"-- Congrats --your post is right on target and you are well deserved of your feature.

Mama Liz's Signature

Judy, good summary!

Last Sunday at an Open House I had this exact discussion with a move up buyer. He was surprised by my statement that he needs to first put his home on the market at a fair price and get a contract, prior to attempting to compete with other buyers.

Christianne - Thank you so much for the reblog, I really appreciate it. This is why it is so important that a consumer find a Realtor that they can trust. There is merit behind the advice we provide.

Sharetha - Thanks for your comment. I am glad you liked my post.

Maria - Yes, they need to list first and then shop. The cart behind the horse does not work, just ask Gail. :-)

Kim - That is my hope too. An educated buyer/seller is much better off in the long run.

Konnie - Home sale contingencies can be very difficult here too. If a property is priced competitively, this type of offer will never stick. The odds are better if you have a signed P&S for the contingent home sale, but if someone can buy without any home sale contingency, you are most likely out of the picture.

Carla - Gary and Malina raised very good points. You do need to evaluate ANY contingency whether you are buying or selling. I feel the same way as you, if there is a note about a seller finding suitable housing, it will not keep me from showing it to my buyer client if the property matches their needs.

I thought the 30 day rent back was a good idea also, and something that could be used in negotiations if necessary.

I love it. You put it out there so now they can't just think they have the upper hand. Love it.

There is alot involved and they need to be on the right track.

Liz - Thanks, I was indeed excited to see that gold star. It was totally unexpected and very much appreciated.

Simone - I have to constantly pinch myself to remember that what is common knowledge for us is not always the same for the home buyer or seller. How many times do we take for granted that they know what we are talking about?

Angelia - I hope they pay attention, none of us put this out there for the fun of it. Our job is to help them to buy or sell real estate, and to make it stress free and successful as possible.

Great points made about the proper order of the home buying / selling process...sure, you can do things OUT of order...but there is an order for a reason!

Judy - some very good words to the wise here. I would say the buyer isn't ready, either. And I am hearing that many sellers will not even consider a contingent offer. Even if they keep the home as active, many folks don't want to even bother looking so the seller loses marketing time. And then there is the fun of trying to corodinate two closings back to back. A real challenge in these days with the banks and delays. Better they have some alernative living arrangement, just in case.

Jeff

Erika - Yes there is an order for a reason and it makes it a little easier when it is followed.

Jeff - I don't like flagging a property for the very reason you mention, it could keep a qualified buyer from even touring the property. This is a big risk for the seller. The alternative living arrangement is always a plus, but not always an option. It is a delicate dance to coordinate these types of transactions. We do the best that we can and as long as everyone makes an attempt to work together it can generally be resolved.

Judy - Congrats on the feature post. I went through a scenario like this with a buyer this past year. Wanted to buy but was reluctant to put her condo on the market. She missed out on four great houses because of it. I felt like I was beating a dead horse every time I tried to tell her that if she was serious about buying she would have to get the condo on the market.

By the time she listed it, the market changed, she never found a home to buy and we never got a buyer for her condo. It ended up expiring and with the drop in sales prices right now she has decided to wait it out until the market changes.

Ready, willing and WAITING! How true.

Hi Judy -- That is always a quandry for a buyer/seller. One has to take a leap of faith sometimes, but only after much careful planning and analysis.

I agree 110%.. One must be Ready, Willing and Able. So many have the first two and just missing the able. This applies to more than just needing to see the current home too.

JUN

2009

I agree. I have several ready, willing and unable buyers right now. It is a tough way to go.

I know one Realtor here who got involved in a fiasco where they did not have their home for sale but told everyone they did when they made the purchase offer. Made for a real mess, but at least I got a home inspection out of it -- LOL.

Judy, Congratulations on the FEATURE!!! Sorry it is a little late - but...

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Donna - I was fired in a sense by a customer that didn't believe what I was telling her. That is what inspired this post. Just like your experience, if your client had listened, she most likely would have sold her condo and been living in one of those four great houses.

Lester - So true! Ready, willing and WAITING. LOL

Chris - This can be a quandary for everyone involved. It is an exercise in futility when you show properties to this type of buyer when there is such a slim chance that they will be able to purchase. You are wasting their time, your time, the sellers time and the listing agents time.

Roland - It took me a while to get to where I am not afraid to say, "I am sorry I can not help you" to clients that are not willing to help themselves. It is liberating.

Christi - I feel your pain. Just keep trying to educate them, hopefully they will understand that you are trying to do what is best for them.

Russel - Oh my, that is a recipe for a law suit. At least you got paid. ;-)

Michael - Thanks for stopping by and especially for the feature. Have a fantastic day. Can't wait to see what is in store for Friday's Fotos.

Judy,

I wrote a post a few weeks ago about how to sell/buy at the same time. It's difficult to educate clients how this is possible. Great post!

Hi Judy.... What a well deserved feature for a well written blog.. This has to be one of the most difficult situations for a buyer to deal with. , especially now in this market. Until the minutes AFTER closing a person doesn't know if it even closes.

I have heard so much talk about fall throughs ...more than I have ever heard..and to add to the mix..justs puts them at such a dis-advantage but we just have to deal with what is on the table and do the best we can Thanks

Lori - It can and is done quite frequently. As long as everyone communicates and works toward a common goal, it generally will work out. Thank you.

June - There can be a domino effect if something slips through the crack. All we can do is keep everyone informed, monitor the progress and do our best to keep it moving forward. Thank you.

Hi Judy~ What may seem like common sense to us, isn't for clients that have not done this before. I like the idea about renting back for 30 days or so.

Vickie - That is so true. I have to remind myself of this on occasion. I think the 30 day rent back is a good idea also. Thanks for your comments.

JUL

2010

Informative and beautiful post... No wonder it was featured. Sorry I missed it the first time around, but I'm glad to have a chance to reblog it.

JUL

2010

Margaret - Glad you liked it. I am heading to RainCamp tomorrow and hope to learn some more tips on how to be a better blogger. If I mimicked half of what you do, I would be doing great!

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Judy Jennings - The Green Company at The Pinehills, Plymouth MA

Plymouth, MA

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508-209-5000

Address: 14 Margeson Row, Plymouth, MA, 02360

Office Phone: (508) 209-5000 x 19

Cell Phone: (508) 725-5858

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Offering quality built condominiums/townhomes & homes built by the award winning Green Company within the Pinehills Community. Visit our models in Winslowe's View 9 a.m. to 5 p.m.

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