What to know when making an offer contingent on selling your home

By
Real Estate Agent with Premiere Property Group,LLC Portland Metro & Suburbs Oregon
https://activerain.com/droplet/9SR

(Cindy's Blog about Portland Oregon Real Estate & Stuff)

What to know when making an offer contingent on selling your home

Oh, there it is, that perfect house. You pull up and nab a flyer just knowing that it has to be out of your price range....you take a double take and see that it is actually well within your price range. You call your REALTOR® and after looking at the inside you realize this home is the one you want.

Only thing is...you have to sell your home first. In fact, you haven't even put your home on the market yet.

The optimal thing of course when you are actively looking for homes when you have a home to sell is to sell your home first. Yeah, I know, why put the cart before the horse right? I so understand how this can be risky...I mean..what if your home sells and you haven't found a new home..will you have to rent..move your stuff twice? Maybe. Unless you are in a rare position where you can buy the one home without needing the proceeds of your current home, you'll need to make an offer contingent on you selling your home.

We are currently in what you call a "buyer's market". That is in most areas, the home inventory is over 6 months. Homes are taking longer to sell on average. Many sellers that have not had any offers might just be open to accepting this contingency if all the other areas of the offer are strong. On the flip side, you now have to SELL your home in this same market.

Here are some things you'll need to think about when you make an offer contingent on your home selling.

1. The seller can and should still be actively trying to sell this property. They won't have it go pending just because they accepted your offer. In Portland, the listing will show on the RMLS (Regional Multiple Listing Service) as "Bumpable" which is exactly as it sounds..you can get bumped out if a non-contingent offer comes along. They probably will have open houses to get in a buyer that doesn't have a contingency.

2. Be prepared to sign a 24, 48, or 72 hour contingency Agreement. If your agent hasn't had you fill this out when submitting the offer, you can expect that the listing agent will advise the seller to have one signed by you BEFORE they accept your offer. If the seller gets a non-contingent offer, say you checked off 24 hours..they will give you 24 hours to waive your contingency and move along with the purchase, or terminate the contract. If you say you'll move along with the purchase, be prepared to show proof of funds on how you'll do this.

3. When putting your own home on the market, you will need to have it in very good condition and priced agressively to sell. Your home needs to be a little BELOW the other homes directly competing with your home. I'm not saying way below, but it needs to be more enticing. You know that the listing agent on the seller side will be running comparables on your home BEFORE the seller accepts your offer. The seller might even have a price point in the counter offer. Think about it from their stand point...when they move their home for showing Active to Bumpable, this does take away some buyers. If your home is sitting overpriced, then it says you're really not serious about buying that property.

4. Some people might want to use a different REALTOR® for the list and buy sides. This is NOT the time to be doing this. It's in your best interest to have one agent who knows all the timelines for both the purchase and sale and can coordinate both to your best advantage. If you have two agents, it can be hard if they are not on the same page.

Purchasing a property with a Contingency Agreement is done often. If you need someone to help you write up a contingent offer, please feel free to contact me.

 

 

 

 

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Knowledgeable, Approachable, Service Oriented

Cindy Westfall ABR,GRI

Premiere Property Group,LLC

5000 Meadows Rd., Ste. 150, Lake Oswego, OR 97035

Cell: 503-819-5241      

E-Mail: cindy@cindywestfall.com

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Disclaimer: All views on my blog are my own and may not reflect that of Premiere Property Group. All pictures and content are my own unless otherwise noted. Please No Copying without my permission.

 Cynthia Westfall is licensed in Oregon State

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Charles Stallions 01/21/2013 11:31 PM
Topic:
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Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Great tips, Cindy.  

Especially #3.  

When a Realtor here in Florida is surfing the MLS to find houses for showing, the words "Contingent" or "First Right of Refusal" may greatly decrease the chance of that property making it onto the Showing List.   

If am the Listing Agent, and a "Contingent on Sale of Buyer's Present House" Offer comes in, even at a very good price, I give the Seller strong warning.

Dec 21, 2010 02:27 PM #1
Rainmaker
484,451
Cindy Westfall
Premiere Property Group,LLC Portland Metro & Suburbs Oregon - Tualatin, OR
ABR,GRI Your Tualatin & Portland Metro Real Estate

Hi Fred, I have had some buyers that don't care if there is a contingent offer if it's the right house for them, but I find that most of them feel bad about possibly "bumping" a person/s out of the house they want so they won't go look ..thus making the buyer pool less for the seller. Something a seller needs to know when accepting a contingent offer.

Dec 21, 2010 03:27 PM #2
Rainmaker
780,619
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Bumpable? I don't believe we use that term in New York. It's a great visual. I think tip #4 makes a lot of sense. The whole thing reads like a "how to manual." Suggest.

Dec 22, 2010 01:51 AM #3
Rainmaker
484,451
Cindy Westfall
Premiere Property Group,LLC Portland Metro & Suburbs Oregon - Tualatin, OR
ABR,GRI Your Tualatin & Portland Metro Real Estate

Hi Jill, Thanks! It's interesting how our local MLS systems can read in different states. When I first saw "bumpable", I thought it is a perfect visual as well.

Dec 22, 2010 02:07 AM #4
Rainer
71,630
Kevin Nash
Shorewest Realtors, Metro Milwaukee - Germantown, WI
ABR, CSRS

This is a very good post. I've never put all this to paper. How long did this post take you. Can I use this off line?  Thanks, Merry Christmas

Dec 22, 2010 02:33 PM #5
Rainmaker
484,451
Cindy Westfall
Premiere Property Group,LLC Portland Metro & Suburbs Oregon - Tualatin, OR
ABR,GRI Your Tualatin & Portland Metro Real Estate

Hi Kevin, Thanks! I have been through this many times representing both the buyer and seller, so it was fairly easy to write for me. Feel free use this off line and if you want to re-blog so it then goes inside your blog..that would be great too! You have a Merry Christmas as well!

Dec 22, 2010 03:34 PM #6
Rainmaker
2,598,648
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

Thanks Cindy for sharing and having done a few I would agree. It is all in how we write the contract.

Jan 22, 2013 10:02 PM #7
Anonymous
Teresa Harbert

What are we seeing currently with contingencies. What advice can you provide me as a buyers agent?

Jun 23, 2015 12:17 AM #8
Rainmaker
484,451
Cindy Westfall
Premiere Property Group,LLC Portland Metro & Suburbs Oregon - Tualatin, OR
ABR,GRI Your Tualatin & Portland Metro Real Estate

 

Hi Teresa, Currently our home inventory is very low at 1.7 months compared to 10 months when I wrote the blog post in 12/2010 (an average inventory would be 5-6 months). It's tough out there for buyer these days! Sellers are excepting contingent offers as currently there are around 40 homes showing Bumpable status (detached homes only) but I will say that I'm currently seeing lots of multiple offer situations where prices can go up quite a bit, so a cash offer is king (no appraisal to worry about). I just ran a search to see just how many “bumpable” homes are out there and currently there are around 40 in the Portland Metro area for detached homes.

 

If you need to sell your home, I'd say get it on the market and once you have a sale (accepted offer) and the buyer has removed all contingencies (financing might be the only one), then you can offer contingent on the close of your home instead of the sale and close. Negotiating a rent back after close can give you some extra time. Hope this info helps!

 

 

 

Jun 23, 2015 02:18 AM #9
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Rainmaker
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Cindy Westfall

ABR,GRI Your Tualatin & Portland Metro Real Estate
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