(Originally Published January 29th, 2013)
It’s a typical conundrum. You want to buy a new home, but you’ve got a home to sell. What if you’ve found the perfect home, but can’t afford to make the down payment without using the proceeds from the closing on your old home. Chances are you’ll need to use a contingent sale offer. This simply means that to be able to buy this new home, you need to sell your old home. It can be a complicated and frustrating situation for both sellers and buyers. Sellers fear that the buyer’s old home won’t sell, is over-priced, or will take too long to sell. On top of that, the sellers may have a new home or different scenario that relies on a specific time table, or even their home selling too! Buyers making offers contingent on the sale of their home are hesitant simply because it is an uphill battle to get their offer accepted to begin with, not to mention the logistical difficulties of overlapping the move schedule for two different homes.
Honestly, contingent sale offers are a hotly debated issue in the Realtor world. If anything, they are necessary for some deals to go through, although difficult to get accepted when the market is fast paced. If one piece of the the puzzle drops out, it could affect several other purchases or sales that are based off a single contingency. Difficulties aside, here is all you need to know about contingent sale offers in Fort Collins, and how to get them accepted.
In Fort Collins real estate, the only real flexibility is time and money. With contingent sales, showing the sellers some money can go a long way. Contingent sales can conjure fears and apprehensions of the unknown, unless compensated with a little extra cash. These offers have an increased risk of never closing, and you need to be able to come up with a strong case to get your offer accepted. This isn’t a situation where you can low-ball and get your offer accepted. Have your Realtor pull comparable properties and pay the fair value of the home, no more/no less. If possible increase your down payment to show the sellers that you’re financially stable, and always include a lender’s prequalification letter.
List Your Home Immediately
If you’re ready to make a move, prove it. It may seem common sense, but you don’t look like a serious contingent buyer unless you’ve got a plan to sell your old place. Not having your home on the market shows that you either don’t have your act together, are disorganized, or just not-so-serious about the deal. It’ll be a waste of time and resources, and you’ll most likely be deemed a ‘looky-loo’. If absolutely need to sell your home in order to purchase a new home, get it listed with us as soon as possible, before you even think about putting in an offer.
Since there is an increased risk of never closing, you need to prove you’re contingent offer is strong and stable and has a good chance of closing. Submitted with your contingent offer, have your Realtor prepare a package including a listing description of your home, and a CMA. If your home is not sold but under contract, have your agent share the non-confidential terms, conditions and deadlines with the other agent. All of this stands to do the following:
- Proves to the sellers that you are serious about selling your home and buying their home.
- Proves that your home is priced correctly – for maximum showings and saleability
- Proves that your home is in sale ready condition and will most likely clear any inspection contingencies
- Provides a deadline or timeframe for when the home is expected to sell..
Contingent sale offers in Fort Collins can be a win/win for both buyers and sellers who have patience. Buyers need to be prepared when making the offer, and sellers need to be compensated for increased risk. The NoCo New Home team can help you weigh the risks and rewards before getting too deep into a contingent sale. Cooperation, communication and disclosure is certainly key to making a contingent sale transaction go through in Fort Collins.
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