1,847,621
I do not recommend this at all. Too many negatives for seller. In our market we have not accepted contingencies on house to sell for years & years.
Just like pre-qualified buyers, went the way of the dodo bird.
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Peter Testa
Danbury, CT
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Lynnea Miller
Bend, OR
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Kathleen Daniels, Prob...
San Jose, CA
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Michael Jacobs
Pasadena, CA
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Fred Griffin Florida R...
Tallahassee, FL
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Ron and Alexandra Seigel
Carpinteria, CA
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Debe Maxwell, CRS
Charlotte, NC
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Nina Hollander, Broker
Charlotte, NC
4,905,762
Before I made my recommendation to my client about accepting the offer with a contingency I would talk to the other agent and get more information about the buyers contract on the sale of their current home. I would check out their house in mls, and would need to know the major terms and conditions. I would then talk to the buyers agent who is purchasing the house and find out their thoughts about their transaction closing and funding.
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John Juarez
Fremont, CA
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Lynnea Miller
Bend, OR
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Kathleen Daniels, Prob...
San Jose, CA
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
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Erika Rae Albert, Aust...
Austin, TX
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Debe Maxwell, CRS
Charlotte, NC
5,257,589
That is a rare occurance these days but, in the past, a hefty, non-refundable deposit would be required and I also do a CMA on the buyers' current home and the marketing being done for it.
It's not 'making sure' - minimal risk is the best you can do with a contingency, Praful.
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John Juarez
Fremont, CA
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Lynnea Miller
Bend, OR
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Lyn Sims
Schaumburg, IL
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Fred Griffin Florida R...
Tallahassee, FL
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Peter Testa
Danbury, CT
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Michael Jacobs
Pasadena, CA
5,115,878
You cannot eliminate risk in this regard, you can only mitigate. You can get some non-refundable money; you need to know everything you can about the buyer's current home listing situation... if they are in a neighborhood where everything sells in a week or less... there is less risk than where things take months to sell.
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John Juarez
Fremont, CA
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Lynnea Miller
Bend, OR
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Lyn Sims
Schaumburg, IL
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Peter Testa
Danbury, CT
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Michael Jacobs
Pasadena, CA
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Richard Weeks
Dallas, TX
1,712,876
You can't ever be 100% sure but I normally like it when they get past inspections.
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
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Nina Hollander, Broker
Charlotte, NC
1,057,404
This is just not rocket science.
Our contingency agreements have a set amount of time, usually 30 days, during which buyer can tie up the property.
If their house is already in escrow, and the inspection period is less than that, then it's no more dramatic than waiting for loan approval. Contract allows us to communicate with the buyers escrow to stay informed as to the status of their sale.
Having said that, if the buyers house is not sold or God forbid not on the market, and it's not in an extremely fast-moving area if it is listed, then we simply wouldn't accept the deal.
Is there risk? Of course there's risk, there's risk with every transaction. it's real estate.
Legalized gambling.
Roll the bones!
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Peter Testa
Danbury, CT
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John Juarez
Fremont, CA
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Candice A. Donofrio
Fort Mohave, AZ
6,424,196
- Bump Clause
- Research the other sale, and the buyers associated with it.
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John Juarez
Fremont, CA
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Bob Crane
Stevens Point, WI
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Candice A. Donofrio
Fort Mohave, AZ
2,684,769
I cannot advise you to accept this offer. Your house will show contingent in MLS, which means that agents won't show it. If the buyer's house never sells, you have lost all that time.
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Lyn Sims
Schaumburg, IL
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Peter Testa
Danbury, CT
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Michael Jacobs
Pasadena, CA
5,244,268
Ken Jones Real Estate Advisor summed it up well and in short form!
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
577,750
It is very rare here that an offer like that would ever be accepted. Hasn't been a normal practice for many years.
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
759,785
There's always risk when you accept a Hubbard Clause but there's risk in any buyer & some homes are most likely to sell to someone with something to sell so how do you mitigate that risk? Ask the buyer's Agent if they are on the market? under deposit? how far along they are into their deal? What are the timelines on their deal? what are the contingencies of their deal? On their offer make sure there is a specified date you must close by otherwise the deal is off...
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John Juarez
Fremont, CA
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Lyn Sims
Schaumburg, IL
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Debe Maxwell, CRS
Charlotte, NC
3,416,038
I make sure the home is under contract, i ask for the contract and info on both the inspections and the buyer for their homes mortgage
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
7,869,927
You need to provide the wording in the contract.
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Peter Testa
Danbury, CT
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
716,891
If the buyer's home is already in contract, then the issue is not as great as when they have not yet got a deal on their home. In Oregon we have a form called a "contigent right to purchase" which dictates timelines for when the buyer's home needs to be in contract plus if acccepted, the seller's home is in bumpable status and others can offer and bump the primary buyer if they are not in a place to remove their contingency.
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John Juarez
Fremont, CA
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Candice A. Donofrio
Fort Mohave, AZ
3,350,439
Advise. Guide. Recommend. Give the seller the information they need to make an informed decision. Beyond that, there are no guarantees.
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John Juarez
Fremont, CA
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Peter Testa
Danbury, CT
191,939
Many others have provided solid answers...one thing I do that has not been mentioned here is personally look at the home they are trying to sell.
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Bob Crane
Stevens Point, WI
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Michael Jacobs
Pasadena, CA
5,772,693
Praful,
I agree with Lyn Sims
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
3,071,489
Ken Jones Real Estate Advisor nailed this one!
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
44,891
put in a kick out clause if the buyers home is not already under agreement with a strong buyer
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
4,350,717
We NEVER accept these offers...
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Michael Jacobs
Pasadena, CA
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Debe Maxwell, CRS
Charlotte, NC
921,504
The contractual laws of the State of Florida do not allow agents to remove risk from a seller accepting ANY offer which includes contingent offers.
The magical words are 'Buyer can terminate at buyers sole discretion."
Guarantees to the seller are not available. However, an agent can try to compensate the seller for their pain with $$$$ from the potential buyer.
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Lyn Sims
Schaumburg, IL
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Michael Jacobs
Pasadena, CA
1,506,773
In California there is no protection for the seller. You are not allowed to have the home listed as "Active", even if the offer is contingent on a home selling that isn't even listed yet! No one will show an "active under contract" listing. Long gone is our status of "Contingent" or "CYB" which would have given protection to the seller.
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Lyn Sims
Schaumburg, IL
5,583,328
that's a contingency that would never happen in this sellers' market.... that's a buyer's market contingency.... when there are tons of listings and buyers call the shots....
at that point, there needs to be a 30 day contingency to sell and then all bets are off....that's how we did them....
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Candice A. Donofrio
Fort Mohave, AZ
716,529
Too long to explain here. There are many ways. It's the subject-matter of a webinar.
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Lyn Sims
Schaumburg, IL
4,583,790
I ask questions in order to minimize risk. This is real estate (and real life) things can and do happen.
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Peter Testa
Danbury, CT
2,785,306
This just means there is more to vett & investigate....
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Michael Jacobs
Pasadena, CA
4,434,177
I discourage such offers unless the house is already under conrtact
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Michael Jacobs
Pasadena, CA
902,388
4,800,132
I do it by stipulating that the listing stays active in the MLS and that these buyers have a 24-hour kick out clause.
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Michael Jacobs
Pasadena, CA
5,879,125
In our brisk Seller's market, I always recommend the buyers at least obtain an offer prior to writing. My sellers won't take them.
1,325,749
Perfect protection for the seller is not available. Attempts to minimize risk for the seller include “bump” clause, limited time periods for the contingency to be removed, due diligence regarding agent’s investigation of the buyer’s sale.
In our current market, more common is a contingency on the part of the seller re: finding a replacement property. In a multiple offer environment, offers to purchase contingent on selling a house are not favored.
3,986,308
3,168,134
1,115
If I had a seller wanting to accept and offer contingent upon a buyer selling thier current home then I would put a dead line on the contingency.
"Buyer has 2 weeks from acceptance date of this contract to provide written evidence of thier home located at 123 Main street being under agreement."
766,669
Time periods are the key and continuing to market the home for backup offers is essential as well. It starts with making sure the buyer's home is listed, priced right and being in escrow would be preferred. I would give them a time limit to have all contingencies on both home removed. There is never a guarantee is sales just doing our best to protect the best interest of our clients.