Will the buyer's offer be accepted if it is contingent upon the sale of the buyer's existing home?
The short answer is: NO.
Here's the reasoning; The seller's primary motivating factors are speed and likliehood of closing. In today's unstable and declining market there's no way to tell when the buyer's house will sell or if it will sell at all.
A short sale takes months of diligent processing until the short sale lender approves the price and terms. Once the lender sends approval, they restrict the closing time to about 30 days.
If the buyer has yet to sell their house, they will be unable to close on the short sale. The contract will be terminated and a new buyer will have to be found.
The seller is now months closer to the foreclosure auction and may lose the house waiting for a new buyer and new approval. There are many other reasons that starting over is detrimental to the seller, including negative impact on their credit, higher deficiency, the property could deteriorate, extended holding costs and more.
If you are a buyer or buyer's agent, please understand that there many reasons a contingency contract will not be accepted in a short sale environment.
David Halpern
Real Estate Broker
Louisville Short Sale Expert Realtors
Louisville, KY
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