Checking The Pulse Of The Kansas City Real Estate Market
When selling a home in a buyer’s market, it can be easy for a home seller to become enamored with any offer they receive. But if that offer is a contingent offer, there’s a lot more to consider than just the price, close date and whether the buyer is asking the seller to play the buyer’s closing costs. A buyer could offer thousands over list price and it would mean nothing if the buyer is never able to get their current home under contract and closed. With few exceptions, this is why I advise Kansas City home sellers to pass on any offer to purchase that’s contingent upon the buyer locating a buyer for their current home. Sellers should ask themselves, why gamble the success of the home sale on a buyer who doesn’t even have their own home under contract?
Assuming you’re not a distressed seller and that your property is not so unusual that it may not see another offer for many months, it would be better to continue marketing your home to locate a better buyer. By “better buyer” I mean a non-contingent buyer. Another option is asking the buyer to come back once their current home is under contract. At that point, the deal would be contingent upon the CLOSING of the buyer’s current home, rather than contingent upon the buyer FINDING a buyer and CLOSING on the buyer’s current home. There’s quite a difference there to say the least.
A home seller can even require a buyer to provide a copy of the real estate contract on the buyer’s current home thus proving the buyer’s current home is under a bona-fide real estate contract. A seller could be even more strict, if they feel it’s necessary, and tell the buyer they won’t consider the contingent offer until the buyer’s current home is through the 10-day inspection process or even past the loan approval process — though that latter is so restrictive that most home buyers can’t meet that restriction quick enough to make a deal work.
The most important thing for home sellers to remember is the seller has control over all the important factors of the home sale, including pricing and condition. But once you accept a contingent offer (where the buyer’s current home is NOT already under contract), the BUYER has control over the same critical factors on their home sale and that could lead to a failed transaction. In other words, the seller has no control over how the buyer prices their current home, the condition of that home, the marketing being done on that home, etc. So consider asking a buyer to come back once their current home is under contract. Or better yet, if they want to negotiate a better price, come back with a completely non-contingent offer, which puts the risk on the buyer (risk of owning two homes if their home sale falls apart for some reason), rather than pushing the risk on to the buyer with a contingent offer.
Posted by Jason Brown
