Tahoe home-selling tips: Study ins and outs of the contingency sale
Special to the Sun-Bonanza
We are in one of those markets where a sale contingent on the sale of another home is worth reviewing. Many of our Buyers in Nevada come from California and most California markets are brisk. Our markets are good, but some homes just need a little extra consideration to make things happen. That can be accepting a contingency sale.
If you are considering making or accepting a contingency sale, there are some things to be aware of to make sure that everybody gets what they bargain for.
Initially, it is important that all parties understand that the new sales agreements have done away with the 72-hour contingency release period. That clause would allow a third party to make an offer on the home, which would trigger a 3-day time frame for the Buyers to prove they can buy the home without selling their home, or withdrawing from the transaction.
Some have it up until the time you enter escrow on the home you are selling. Be sure you know the contract terms you are agreeing to.
Most California Buyers tell us how strong their market is and how fast things are selling. That is fine, as long as they are priced right for their market. Regardless of the strength of a market, an overpriced home will inevitably take longer to sell, if it will sell at all.
Make sure the motivation to buy is equal to or greater than their motivation to sell. If they aren’t motivated to sell at a realistic price for the time frame they are contracting to complete the transaction within, then you may be doomed from the start.
Occupancy can be an interesting component of the sale if the property is occupied. It is hard to schedule a move if you don’t know when your sale will actually solidify, i.e. their home sell to bona fide qualified Buyer.
It’s important, too, to know if your Buyer’s sale is contingent on the sale of a home. Serial contingency sales, known as a Domino Sale, can be dicey, as the number of transaction components that can go wrong are increased dramatically. They can happen, but it requires trust, integrity and commitment by everyone involved. Even then, sometimes things happen that are beyond the control of the affected party.
Backup offers on a contingency sale are helpful to everyone. The Seller has an alternative in case the first offer fails to perform. The first Buyer has additional motivation to get sold and close in accordance with the terms of the agreement they’ve made.
The second Buyer has the opportunity to step in and buy the home they want if they move to primary position, and they can look for another home all the while until they are moved to first position.
If you don’t make your offer in a backup position, the Seller might extend the first offer when they would have accepted your offer if they knew it was available.
Our Advice: Don’t sit on the sidelines and speculate. If you need to sell to buy, but want to know where you are moving to, you can make a contingency offer or sell your home and negotiate terms that allow you to go shopping for another home after the close of your home.
If your home has a quirk or two that are preventing it from getting offers, then it is a good idea to consider a contingency sale. It could work out, but if not, other Buyers that have their eye on it, but haven’t written, could be spurred into action.
Either way, the action is what you want. The more activity you get on your home the more likely you will get it sold and closed.
Don’t be afraid of a contingency sale if the benefits are appropriate. Pay attention to details and don’t assume you understand what is going on. Not everyone can buy without selling, and most people only want to move once.
See what you can do to make both parties happy and all will work harder to making the transaction work if the going gets tough along the way. A closed escrow is everybody’s objective — this is just a longer way “home.”
Lisa Wetzel & Jim Valentine, CDPE, SFR, work for RE/MAX Realty Affiliates in the Carson Valley. Visit carsonvalleyland.com or call 775-781-5472 for information.
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