When sellers are considering an offer from a buyer, understanding the effects contingencies often are under estimated. Contingencies are considered to be the ability to obtain financing, inspections, septic inspection, pest inspections, appraisal, early occupancy, but for the sake of discussion let’s address the “contingent to sell existing home”.
Contingent to sell existing home is when a buyer’s offer cannot close unless the buyer’s original home sells first. And there are times when a buyer may submit an offer, even though their existing home is not listed yet. This scenario creates an open-ended contract with no end in sight. This type of offer will lock up your home from selling to anyone else until the buyer’s home sells.
When entertaining an offer with a contingent to sell situation, it is best to get all the facts regarding the buyer’s situation. Is the home currently listed? What is the condition of the buyer’s existing home? Will it be difficult to sell? If the buyer’s existing home is under contract, what is the terms of that purchase agreement? These material facts are very important. Not knowing, could prevent your home from selling to a better offer.
Implementing time restrictions will also provide some peace of mind. By placing time limits for the buyer to perform the contract, also known as milestones, in a reasonable time is very sensible. Giving the buyer 14-days to have an accepted offer on their existing home; Buyer’s existing home must have all contingencies satisfied within 14-days. Providing milestones will keep the process moving and buyer’s performance of the transaction with a higher level of urgency.
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