Dory, Home Buyer in Portola Hills, CA

Ridiculous offer with contingency?

Asked by Dory, Portola Hills, CA Sat Aug 8, 2009

I'm head over heels in love with a Million dollar home, but can only afford an $800k home, contingent on selling mine to take my $200k equity thus making my loan $600k. My house isn't even on the market, nor would I sell for any reason but to get THAT house. Is an offer such as this even possible or remotely plausible? Would I just be embarrassing myself? :-)

Help the community by answering this question:


A home Sale and Settlement Contingency is a negative thing to any home seller. You are asking the home seller to stop the marketing on their home and allow you the time to list your house and find a qualified buyer. Will your home be priced correctly to sell? Will your agent be pro-active in finding a buyer? The seller is taking a big risk.

Sometimes, the seller reduces the risk by continuing to market their home. If another buyer comes along then they can possibly accept that offer and kick you out of the picture (this is all dependent on how the contracts are written).

So, you are asking the seller to accept this condition and in addition accept 20% less for the house. Typically, when you have a home to sell you have to sweeten the pie by making a better offer to the seller.

You didn't state how much your home would be listed for but you are relying on $200,000 in equity. What happens if you can't get that price? When doing a Sale and Settlement Contingency it is expected that you will price your current home to sell it within a reasonable amount of time. If you have to drop the price, you may not have the money to purchase the new house.

I'm not familiar with your local real estate market ( I work in Lehigh Valley, PA) so you should consult a local real estate agent but I can imagine the seller saying "What are they nuts? $200,000 less plus they need the time to list and sell their current home!"

Now, in comparison, imagine you offered them 1.1 Million. For that, they would probably jump on the offer and give you the time to sell your home.

All of these conditions (purchase price, inspections, contingencies...etc) work together to get a home seller to accept an offer.

Hope this is of some help.


Joe Finnerty
Long & Foster Real Estate, Inc.
Bethlehem, PA
Office: 610-865-7776
2 votes Thank Flag Link Sat Aug 8, 2009
Dory -

You've received some terrific feedback from many professionals here. I have a hypothetical question for you to ask and answer for yourself:

Assuming they have priced that house at market value for $1 Million - you want the seller to accept $800,000 - a 20% decrease. Similarly, if you listed your house at market value, would you accept a 20% lower offer along with a contingency from the buyer that they sell their house first in order to buy yours - - - - in this market?

There are always methods to get the home you want, but since you would have to sell first, you should apply the same theory to your sale as to the new purchase to bring it into perspective.

Best of luck and, always use a REALTOR,

Thom Colby
Broker & REALTOR
Orange County, CA
Web Reference:
0 votes Thank Flag Link Sun Aug 9, 2009
You have a lot of questions that need to be answered. What the million dollar house will really sell for? what your house will sell for? do you have enough equity to pull out closing cost for both properies and still have the $200K left? Is the seller in a possision that they would except this offer? Email me and I'll get as many of these aquestions answered for you and then go from there. Never worry about upsetting the seller with your offer or embrassing yourself, if it works great ,if it doesn't you haven't lost anything.
0 votes Thank Flag Link Sun Aug 9, 2009
Good Morning Dory,
I have found that in many cases there is a way to work things out. Will a seller take 200K less for their home. If it is truly worth a million, probable not. Maybe the home is over-priced to start with and you are not so far off the mark as you may think. If the home is priced at market value and you need to pay 1 million for it, are you certain you cannot do that? There are still interest only loans out there that may make that home affordable to you today. I would only suggest that if you are not on a fixed income and know that you are upwardly mobile and your earning potential will increase as time goes on. In all real estate home sales we need to consider the individual first and see if there is a reasonalbe solution to the situation. That is so much of a Realtors job, finding a good way to make things work for our clients!
Connie Bramble
Web Reference: http://OCREALTORCONNIE.COM
0 votes Thank Flag Link Sun Aug 9, 2009
Hi Dory,
It's possible to do what you are considering but part of the plausability rests upon your financial situation outside of your home ownership. $800 won't buy a Million Dollar matter how you stretch it. That amount will buy a very nice home though, if you would like to move up and then possibly save for that future Million Dollar Dream Home.
0 votes Thank Flag Link Sun Aug 9, 2009

You will never know unless you ask................As rediculous as some situations appear on the surface, we later find that thinking creatively, " outside of the box" can get the job done.

You have already made the first take it to the next step by contacting a real estate professional to support you in your efforts.

Best wishes
The Eckler Team
0 votes Thank Flag Link Sun Aug 9, 2009
Email me the address of the Million Dollar home and I will let you know the seller's situation. Then I can better assist you in tackling this situation.

Web Reference:
0 votes Thank Flag Link Sun Aug 9, 2009
Who is the seller of the "Million Dollar" home? If it is the bank, any loan contingency will kill the deal i.e., no deal.

If it is a private seller, you could negotiate for a seller financing with the first payment due upon the sale of your home.

How motivated are you in selling your home? Could you really pull out $200K to use as the down payment for your dream home? i.e., based on current down trend market, does your home has the expected equity?

The ball is in your court, you need to quickly sell your home to entice the "Million Dollar" homeowner to work with you...assuming the Seller is also motivated.

If you would like assistance to negotiate seller financing, I can help...(888) 525-0125
0 votes Thank Flag Link Sat Aug 8, 2009
Hi Dory,

It all depends on the situation of the other house on the market. How long it has been in the market? Is it a bankown or shortsale? Do you know the CMA(comparative market analysis) for that house(how it has been priced compare to the sold and other homes in active, pending or back up)? How desparate is the seller and if they have received any offers(how much attention this house gets from other buyers)?

If the seller is willing to accept your contingency offer(you should also accept an offer that lets you sell your home contingent upon you buying the other house(close escrow)) you should go for it.

Prudential California Realty
Mission Viejo
0 votes Thank Flag Link Sat Aug 8, 2009
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