I tell my sellers to consider all offers a compliment, and a contingent offer as a concession. When an agent calls to find out if we will consider a contingent offer, I always say it depends on the offer, the home the buyer has to sell, the track record of the agent in getting listings sold and the price they intend to market the home at.
With average market times being longer than a few years ago, the contingent buyer has to be aggressive in their pricing and marketing for me to advise my client to take it. The purchase price offer has to be attractive and worth waiting for.
Contingencies are working if everything is done right, but you have to build a compelling case.
They've always been seriously considered, except maybe in the first few days the property is on the market. But a glimpse at the NWMLS shows only five Bellevue homes sold "contingent," so if two more go contingent this week it will be the fastest growing trend in real estate!
All the best,
The challenge with contingent offers in any market is that they essentially take the property off the market. Showings drop dramatically once a property shows contingent.
In fact, in a Buyer's Market, where the Buyer has the advantage and there is a wealth of inventory, the problem for the Contingent Seller is exacerbated. There are so many properties for a Buyer to choose from, that the Seller with a contingency for the Buyer to deal with, gets ignored.
In my experience contingent offers are 20 - 30 days, just enough time for the Contingent Buyer to get their propety sold if it is priced right. It is usually wise for the Seller's listing agent to shorten the bump period to two days to try to lessen the negative effect of the second buyer having to deal with a contingency.
I know it can feel scary, but if you have to sell a property to be able to buy, the best strategy is to get your property sold and then you are in a great negotiating position because you are a ready, willing, able buyer. Of course you will also need a pre-approval letter from your lender.
The time frame depends on the contingency, the importance of the contingency and the overall impact it may have on the transaction, if an agreement is reached.
However, if you and your agent plan ahead and structure your offer accordingly, you may be able to make your offer attractive enough and the seller may consider it. Best wishes to you.
Bridge loans add too much cost in this market...better to move to a rental if you want to sell before you buy...or price it well and stay with relatives for the first couple of weeks when showings are the heaviest.
I reciently put together an accepted contengency like this.
The (Buyer) with the contengent offer had their home listed at $549,500. Once I ran the comps I found them to be $20,000 over priced.
This is what we offered back.
My clients accept the contengency if they 1) Dropped their price to $530,000 for 3weeks, then they drop to $525,000 for 2 weeks, Then they drop to $515,000 for the remainder of the contengency.
So basically we accepted the contengent offer, but we controlled the contengency to get the sale.
They closed at $522,000 and purchased my client home in Bellevue which closed this past Thursday.
I have represented two buyers this year who have bumped the first position buyer who made the contingent offer. The other downside to a contingent offer is that you'll spend money on an inspection with no guarantee the home is yours. If you are actively looking to buy a new home, it's best to get yours on the market now. Even in the event you sell yours first before finding a new home, you can always rent for a while. That's a much better scenario than feeling the pressure of selling your house, especially if some other buyer wants the same house!
Best of Luck!!
Lots of good answers. If I were representing a seller, I would advise them to take the contingent offer in this market only and only if the property was in a desirable location and in good condition, was priced slightly below market and the sellers (potential buyers) were really motivated. Other than that as suggested by others seller is taking a big chance.
Good luck house hunting.
As to resale, it really depends on the season and other factors. A contingent offer today would more likely be accepted than one on April 1, as the seller doesn't want to lose "prime time". Being "tied up" during October, November and or December is not as bad as being tied up in April, May and June.
How long the property is on market is a factor. Also you usually pay more for the house with a contingency than someone who doesn't have a contingency, so the seller usually makes more by accepting a contingency.
Any agent worth their weight in salt would first study the reasonableness of the buyer as to price and condition of the home they are selling. Often people who want to buy contingent on the sale of their house also overprice their home. So one of the key factors is how motivated is that buyer on the sale of their home, and are they really willing to sell it at today's home prices.
I doubt any seller would consider a contingent offer as soon as their home goes on market. There could be exceptions...but that is normally the case. On market 242 days...heck, why not take a contingent offer. :)
Contingent offers are more common now than a few years ago so it is much more of a possibility getting one accepted. But each situation is different. Most sellers will want to take into consideration the location, style and price point of any contingent home. Some sellers are not in a position to wait. Some buyers do not want to be in a position to be "bumped" should a better offer to the seller come along. There are lots of variables for the parties and their respective agents to consider.
It is still a long shot. Even non-contingent offers are struggling to close. So contingent offers offer even more hurdles.
In a slower market contingent offers are definitely given more weight than in a sellers market.
It is important to remember that once a seller accepts a contingent offer, the traffic (agents previewing or showing) on their house usually decreases thereby creating apprehension on the part of sellers to accept contingent offers in the first place.
Lake & Company