Should you consider contingent offers when selling your home? It could be worth the risk, but there are factors that you should consider that I’ll go over today.
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You should consider many things before making a decision, the first of which is your motivation to sell. What is your time frame? Do you need to be somewhere by a certain date? Since there are several types of contingencies, always consider what type of contingent offer you’re facing—and why.
A home inspection contingency, for example, is standard. If it’s a mortgage contingency you’re dealing with, the key is to determine whether the buyer is qualified. In our terms, we define ‘qualified’ as having a written mortgage pre-approval where we’ve spoken directly with the lender. There are even very specific questions we’ll ask the lender to ensure they’re willing and able to get approved for a loan.
The contingency that brings concern is the contingency on the sale of another home. We need to examine the home’s location, whether it’s even on the market yet, and the value of the home so we can tell if it’s priced properly. We also need to consider the condition of the home and the market conditions in the area.
A contingent offer might be a risk you’re willing to take.
Are there buyers for this home? Do you believe that the home is more likely to sell than yours? These are the kinds of questions we need to ask when considering a buyer contingency.
Now, if the market’s slow and everything about the offer is strong, accepting a contingent offer might be a risk you’re willing to take. However, I would caution you to be sure that there are escape clauses to allow you to proceed with another buyer if they come along. You want to be sure that if you don’t choose this buyer, you’re free to move in a different direction.
If the contract is prepared properly, it can be a win-win for all parties. You have to be sure you’re covered, though. As always, you want to consult with your attorney and real estate broker.
Buying or selling a home in the Southwest Florida market? Give me a call or send me an email and I’d be glad to help you. I look forward to hearing from you!
