Mike, Home Buyer in Annandale, NJ

Advice needed! We would like to put an offer on a home that is under contract with a home sale contingency. Our offer is probably going to be less.

Asked by Mike, Annandale, NJ Sun Oct 16, 2011

We have no home sale contingency. Home has been for sale nearly 5 mos. How can we get sellers to consider our lesser offer?

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13
Hi Mike, have your agent find out if you the seller is accepting back up offers - the listing agent will be able to answer that question . Our answers are speculation here - if the accepted offer is contingent and has a kick out clause as I described then the seller may have positioned himself to be able to consider non-contingency contracts, with the understanding that the buyer in place has some sort of kick out or right of first refusal to life the contingency and hold onto the deal.

Best,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Mon Oct 17, 2011
Mike,
Ethically, your offer should only be visited if the current contract falls through. Had the other offer only been in attorney review, you would have more of a chance.
You say the home has been for sale for five months. Why didn't you "pull the trigger" sooner?
I would look and see how long the home has been under contract. If it has been an inordinately long time, then perhaps the buyers are having trouble. But keep in mind these sellers were willing to accept a contract with a sale contingency.
0 votes Thank Flag Link Mon Oct 17, 2011
Sellers want deals to close. Sometimes price is not the most important thing. The other terms, and contingenicies is one of them, are important as well. Another important factor is financing. Cash will often beat out a mortgage, or a higher percentage down will be seen as a stronger offer than a lower percentage. By all means have your agent put in your offer - you have nothing to lose and everything to gain.
0 votes Thank Flag Link Sun Oct 16, 2011
Hi Mike,

A listing agent is not required to disclose the terms of an existing contract. What info they will share depends upon the instructions of the seller, and negotiation and strategy techniques of the listing agent. Rarely do listing agents disclose the price. Sometimes agents will hint.

Contingency clauses in contracts differ. We don't know if this contract contains a performance due date for the contingency or a kick-out clause. If it does contain a kick-out clause, we don't know the terms or conditions associated therewith.

Unless a seller specifically instructs their listing agent not to deliver back-up offers, your offer will be presented to the seller. Few sellers deliver that instruction, and agents must forward any offer to a seller absent instructions to the contrary.

Sellers are motivated by offers which are likely to close, meet their price expectations, and accommodate the seller's time frame. Further, sellers gravitate to those contracts which give strong indication that the buyer will not attempt to make changes, renegotiate the contract post-inspections for trivial matters, and follow through as they represent.

If the seller is going to consider your contract as a possible replacement for the existing contract, or a back-up offer, the more attractive you make yourself by considering the issues that are important to the seller, the more attention grabbing you will be. A buyer agent still has to sell, represent and negotiate for their client.....so add in the role of your buyer agent when considering your strategy.

Your agent can ask the listing agent about the existing contract and terms.

Good luck.
Deb
0 votes Thank Flag Link Sun Oct 16, 2011
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
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Mike - as previously stated, your offer will be considered a back-up offer because someone beat you to it:) If you think your offer is less than is what's on the table (how would you know that anyway?) you will certainly sit in 2nd position. If your offer is better, then sellers may ask the first buyers to drop their contingency to stay in 1st position. Really depends what else you can offer to assure the buyers as to why they should take a "good" offer off the table to replace with yours. Are you bringing more cash to the table by financing less and therefore are less of a risk to get a mortgage approval? Can you close when seller wants to close? Are you willing to do things that make you "more of a sure thing"? Good luck!!
Web Reference: http://www.LynnDachisen.com
0 votes Thank Flag Link Sun Oct 16, 2011
Sellers that accept a contingency offer are usually swayed by a higher price. Which we both know is meaning less if the buyer fails to meet the contingency on time.
The only advantage of placing a back up offer with a lessor price is the ability to compete with the terms rather than the price. This could be effective if the buyer is offering cash, no contingencies, as is, close immediately.
0 votes Thank Flag Link Sun Oct 16, 2011
The absence of a home sale contingency has value in a head to head battle with an offer with a home sale contingency - why? - because of the greater certainty. What I generally see is that the contingent buyer will likely have a kick out clause. The way they usually work is the buyer has a certain period to lift the contingency or lose the deal if another, non-contingent offer that the seller will accept is presented. That offer could be for the same amount, more, or less.

Work with your agent on a review of the market facts - an offer based on the market data/comparables will have a much better chance of success than one that isn't.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sun Oct 16, 2011
If the primary has a kick-out contingency your offer could be accepted if the primary does not remove the home sale contengency and proceed to close.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sun Oct 16, 2011
What is your agent advising...keep in mind that if the property is currently in contract, your offer will be considered a back up offer, and only entertainable if, and when, the current deal falls apart....
0 votes Thank Flag Link Sun Oct 16, 2011
Mike,
If you are using an agent and the home is listed with another agent have your agent contact the listing agent and let that agent know you desire to put an offer in on this home. Your agent can find out if the seller's will consider your offer. Sometimes contracts have clauses that allow seller's to consider other offers with some restrictions. If your offer is not through an agent and the property is not listed with any agent / agency, then conact a real estate attorney or an agent for assistance.

All the best,
Gary Geer

http://www.GaryGeer.com
0 votes Thank Flag Link Sun Oct 16, 2011
put your best offer in writing with required proofs and letter of introduction. If offer is sufficient and sellers can kill other they will.
0 votes Thank Flag Link Sun Oct 16, 2011
Mike you need to find out if there is an "out" or 1st right of refusal such as if another offer comes in, the 1st offer has 48 hours to remove their contingincy or iot can be sold to the new buyer withot a contingincy. if there is no 1st right of refusal you offer would simply be a back offer, you should base your offer on what current market value is, back it up with comps so the seller can see why you offered what you did,
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Oct 16, 2011
You offer will be a back up offer and will only become primary if/when the primary expires or dies for one of several reasons. Normally a contingent offer is made very close to over full price to get the seller to accept it rather than waiting for a lesser amount with an offer that is not contingent. If the sellers are in no particular hurry they often will wait while the buyers try to sell their house and buy theirs. This sounds like it might be the case here, and if so the sellers may continue to wait. Making your best offer first might get their attention but it all depends on how motivated the sellers are.
0 votes Thank Flag Link Sun Oct 16, 2011
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