Q: Is there a way for a buyer to make an offer on a home which is contingent upon the sale of their current home?
A: There is an option on the NC contract where an offer can be made under the “condition” that a buyer must list and sell their current home prior to closing on this new property. Also, the offer can be contingent upon the successful closing of the buyer’s home, meaning their current home is already under contract.
Q: Why would a buyer want to make a “contingent” offer?
A: 1. Many buyers are uncomfortable with the thought of making mortgage payments on two homes at one time.
2. They don’t want to sell now and rent until they find their new home.
3. They can’t qualify for a new mortgage without selling their current home.
Q: What are the consequences if a buyer makes a contingent offer which is accepted, and can’t close?
A: 1. Nonrefundable due diligence money is still requested for a contingent offer. If a buyer can’t close, that due diligence money is forfeited.
2. All expenses including inspection expenses and costs related to obtaining a loan are due and nonrefundable.
Q: Why would a seller choose not to accept a contingent or conditional offer?
A: 1. There are so many buyers right now, if the seller has multiple offers, they might choose the one with no contingencies (a “clean” offer) over an offer with a higher purchase price.
2. Sellers don’t want to stop marketing their property or “take it off the market” by accepting a contingent offer.
Q: Why would a seller accept an offer which is contingent upon the sale of the buyer’s property?
A: 1. The seller’s home has been on the market for awhile.
2. The terms including purchase price, due diligence money and closing dates are otherwise acceptable.
3. The seller has researched the buyer’s property and knows that it is in a hot selling area and in a price point which sells quickly.
Q: Is it beneficial for the buyer to sell before buying a new home?
A: It can be very beneficial. The buyer has their equity in hand, so they have clarity about how much their down payment can be and what their new mortgage payment will look like.
THE BOTTOM LINE: KNOWLEDGE IS POWER
1. Make sure that you know the current “most likely sales price” of your home, and have a NET SHEET which shows a breakdown of the costs associated with selling. The value of your current home may be higher than you think.
2. Talk to your lender about options to purchase before you sell. Be creative. Talk about short-term lending solutions and having your loan recast once your sale has been completed.
3. Remember what is ultimately driving this move in the first place. Do you want a larger or smaller home? Different neighborhood or school district? Sidewalks or a golf course? Acreage?
4. Consider selling now, and asking the buyer to rent the house back for a certain period of time so that you can identify a property and move.
In many price points and locations, this is still a seller’s market. Make the offer as clean as possible, and you will have the best chance of securing the property.Cheers!
Berkshire Hathaway HomeServices Carolinas Realty
Tori Boysen
Broker
336-345-3499
tori.boysen@bhhscarolinas.com
www.toriboysen.com
