Before I begin today’s topic, I want to alert you to our annual Pumpkin Giveaway event. Every year, we give out free pumpkins to those who RSVP. To receive your pumpkin, RSVP here before October 13, and you can pick yours up from our office anytime between October 21-23. This is just our way of saying thanks for supporting our business and to hopefully help you have a better Halloween.
Now, back to our topic: home sale contingencies. A home sale contingency means that a buyer’s offer to purchase a home is contingent on them being able to sell their own home.
We’ve had a lot of sellers lately asking us whether they should accept a home sale contingency from a buyer. We recommend that our clients approach that conversation in a specific way that is geared around them winning. It’s great to be able to get a buyer who wants to purchase your home, however, if there’s a home sale contingency on the offer, that could get in the way of the closing.
To help our clients, we build safeguards into the contract to make sure we’re setting up our sellers for success.
First, we write a clause into the contract that says that we’ll allow them to do a home sale contingency—however, they only have two weeks to get their current home under contract. We ensure that they’ll sell within that time period by coming up with an agreed-upon list price for the buyer’s current home. We’ll have them get an appraisal done, and sometimes I’ll personally do a lot of research to figure out what price they’ll need in order to guarantee that they’ll sell within those two weeks. Typically, we can figure out a price that will help them sell their home within just a couple of days.
We also write into the contract that the contingent buyer must also close on their current home’s sale within 45 days. That means they have two weeks to get their home under contract and another 30 days to get both transactions closed (their current home sale, as well as the one with us).
Finally, we stipulate in the contract that the buyer cannot also accept a contingent contract when they’re selling their current home. Creating a daisy-chain of home sale contingency contracts just adds a lot of unnecessary risks.
Sometimes we also add a non-refundable deposit into the contract. We have a lot of control over the transaction that we exercise to guarantee that our sellers are successful. When we get buyers to agree to those terms, we’re able to help our clients achieve their goals.
If you have any questions about today’s topic, don’t hesitate to reach out to me. I’d love to hear from you.