A real estate transaction usually comes with several standard contingencies, such as the buyer’s ability to have the home inspected and a contingency that the home is appraised for at least the purchase amount. While these contingencies are normal, there’s one contingency home sellers should consider carefully: an offer contingent on the sale of the buyer’s home. In most cases, these offers come with nothing but risk and stress. The experienced professionals from 92101 Urban Living, a premier source of information and expertise about downtown San Diego real estate, offer this advice to homeowners about working with contingent buyers.
Why a Contingent Offer Is a Risk
As a seller, you want to sell your home quickly and for the most amount of money. You may be tempted to accept a contingent offer, especially if your home has been sitting on the market or the buyer’s offer is above list price. However, you may want to take a step back and consider the risk. Selling a home can be stressful, and surprises may come up during the process, such as necessary home repairs or a low appraisal. Making your sale contingent on the sale of someone else’s home only introduces more stress and greater risk because you have no control over when or if the buyer’s home sells.
Accepting a contingent offer also restricts how you can market your home. After you accept a contingent offer, the status of your listing will be updated to “contingent” or “pending.” Your listing will not show up on most searches by other buyers, so you won’t have backup buyers if the sale falls through.
When a Contingent Offer Is a Good Idea
Contingent offers generally come with a lot of risk, but not always. If the buyer is already far into the escrow stage on his or her current home, accepting a contingent offer is less risky. In this case, it’s still a good idea to make your transaction contingent on the completion of the buyer’s transaction. If the buyer’s transaction falls through, you should have the right to terminate escrow.
You may also want to consider a contingent offer if it’s much better than other offers you’ve received. It’s worth the time to ask your real estate agent about the chances of the buyer’s home selling. Your agent can determine if the buyer’s home is priced well and if market conditions offer a good chance of its selling quickly. A contingent offer may also be worthwhile if your condo in downtown San Diego has been on the market for a long time or appeals to only a small group of buyers due to its special features, renovations, or design.
How to Get Around a Contingency
If you receive a contingent offer that you otherwise want to accept, one option is asking the buyer to remove the sale contingency in exchange for a longer escrow. This gives the buyer more time to make sure his or her home sells, but you can keep the earnest money deposit if the buyer can’t sell. Keep in mind a buyer who is reluctant to accept this counteroffer isn’t confident his or her home will sell, so you shouldn’t be, either.
If you’re looking to sell your home quickly and with the least amount of stress, accepting a contingent offer may not be the most appealing option for you. For the best advice about selling your downtown San Diego condo, loft, or penthouse quickly and for the highest price, rely on the experts from 92101 Urban Living. Give us a call today at 619-649-0368.