How to Use Contract Contingencies When Buying Before Selling
Monday February 12, 2007
In seller's markets, it's unusual to find buyers writing offers to purchase that are contingent upon the buyer selling. That's because inventory is low in those markets, and sellers can afford to make demands on buyers that involve writing purchase contracts without such contingencies as appraisal, loan or repairs, much less a contingency to sell the buyer's home.Buyer's markets are the opposite. Sellers receive a lot more offers with a contract contingency to sell. It's no skin off the seller's teeth to take a contingent offer, because the seller typically retains the right to force the buyer to withdraw the contingency or cancel the deal if the seller receives a better offer from somebody else. Yup, sellers can kick that buyer to the curb. But it all depends on how the contingency is negotiated.
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Comments
This is an oft-misused technique that, if done correctly, stands to minimize exposure for clients and make life easy for Realtors. I hope lots of Real Estate professionals read this.
Yeah, I’ve seen this used and MISused too. The biggest thing is to have 72 hour kickout clause and use it correctly. So if the buyer can’t get their act together and another buyer comes in with a better offer, buyer 1 has 72 hours to improve their contract.
This is used often in buyer AND seller markets in our area and it keeps things a bit normalized