In today's market, you'll often find buyers making contingencies in contracts that they must sell their home first. In hot markets, few sellers would waste their time, but in a slow market, many sellers would accept such a contingency. There are a number of contingencies a buyer can have in a contract. Some frivolous, some not frivolous. Since this particular type of contingency is becoming more commonplace, it would be wise for us to talk about it some and be better prepared as sellers. We'll also dive into contingencies in general and how to handle them.
One of the first options for a seller in response to a "frivolous" contingency would be to verbally explain that "having the contract subject to approval of the wife's, cousin's dog by closing" makes the agreement virtually nonbinding on only the buyers and is unacceptable. Sometimes just hashing it out on the phone between agents will be enough to drop such nonsense. In the case of a buyer who has a home to sell, dig a little further to see if the buyer can buy the seller's home without selling theirs and make sure the bank can prepare a letter stating their buyers can perform. Obviously if the buyers are holding enough CASH, then make the strong recommendation to purchase straight up and leave the sale of their home out of the contract.
If you as a seller do decide to accept a contingency that may seem frivolous or that gives the buyer time to sell their home, add a benefit to yourself that allows you to continue marketing, showing, and accepting other offers. I'd also add that if you do accept a "backup" offer that the buyer has 48 hours to remove their contingency. Another way to go is to increase the earnest money. Holding a little more of the buyer's money will motivate them more to sell their property quickly and walk the line in order to purchase your home. Don't forget to add timelines to these contingencies. If a buyer has a home to sell, make the contingency subject to a timeline of 30-60 days. I don't feel that giving the buyers all the time in the world to sell their home puts the seller in a very good position. So if the wife's, cousin's dog needs to see and approve the home, put in that they have 24 hrs to get the approval!
If you have real estate to sell and need an expert negotiator to assist you then contact me, Alex Elkorek, at Rooftop Real Estate Company. I can be reached on my cell at 970-219-8595 or via email at email@example.com. You can also check out my website: www.RooftopRealEstateCompany.com for more information. Thanks!
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