Wednesday, August 17, 2016

Contingent Offers

CONTINGENT OFFERS.....all of a sudden I've had a number of clients who want to make a "contingent" offer  on a property.  They're afraid to put their home on the market for fear it will sell and they won't have anyplace to move to.......but, on the other hand,  seller's are very very very hesitant to accept any kind of contingent offer because they know the stronger offers are those where the buyers are already preapproved and do NOT have to sell another property.  It's been a big challenge lately.  Whether someone is looking to "downsize"  or move up into a larger home,  it's a challenge for both the buyer and the agent to get a transaction like this together.  Sometimes clients are very adamant about "just trying" to see how a seller responds,  but to be perfectly honest,  it has been my experience after 38 years in the business,  that it is a B I G waste of time for everyone.
That being said,  I will say that I HAVE written several contingent offers in the past few months.  Not because I thought they would be accepted, but because I have some great clients who will keep coming back to me but who still do not totally "believe" it's a waste of time.  So we write the offer and we get rejected.  Every time!  Not only are we in competition with non-contingent offers, we're in big-time competition with all cash buyers!  Yes, there are still alot of cash buyers out there....and if you happen to be writing an offer on a property where you're in competition with cash buyers, forget it.  You're cooked!  

IF a property has been on the market longer than normal (like over 30-45+ days) you "may" stand a chance....OR if the property is over-priced or priced higher than other comparable homes in the neighborhood and you're willing to make an offer that the seller may consider (in spite of it being too high $$)  then your odds go up.  You may be the only one making an offer on that kind of a property so you very well "may" get a seller to accept a contingency and give you maybe 30 days to get your home sold and in escrow.  But those are probably the only kind of properties where a seller, in today's market, may consider a contingent offer.

Now,  come fall or winter, the market may adjust with more active listings and you may very well find seller's willing to consider a contingency.  But current statistics are indicating that prices are not going up as quickly as they had in the past, and you surely don't want to offer too much for a home just to entice the seller to accept your contingency. I don't think we're going to see a rapid decline in prices, but we're sure not going to see skyrocketing values between now and next spring.

One of my current clients wants to purchase a larger home in a better neighborhood.  After considerable discussion and consultation,  we listed their home for sale and are now in escrow. Their plan is to store more of their belongings and move into an apartment so they're in a better position with their money in the bank, and be preapproved to purchase another home.  Not all sellers are willing to do that.  In this market though,  that's about the only alternative IF you're set on making that move.  Some seller's "used" to list their home for sale "contingent upon them finding another suitable property".   Well,  that doesn't set well with prospective buyers though either.  When they find a home and fall in love with it,  they don't want to have to wait until that seller finds the
"home of their dream" before being able to accept the offer.  That means the buyer sits and waits and maybe loses out on other potential homes while they're waiting for the seller to decide what they want to do.

So IF you're thinking about making a move, talk to your real estate professional  and figure out a strategy.  Putting your home on the market and making a move can be a smooth transaction if you have a plan and a good professional Realtor to help you.  There are many excellent Realtors in our area.  Find one who is willing to sit down and talk to you about the best way to proceeed.  Whether you're ready to do it today....or are thinking about a future move,  it's never too late to be prepared.
And those of us who have been in the business for so many years are always happy to help you however we can.  Just pick up the phone and call or text!