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.
Long & Foster Real Estate, Inc.
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,
Broker & REALTOR
Orange County, CA
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!
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 home..no 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.
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 move...now take it to the next step by contacting a real estate professional to support you in your efforts.
The Eckler Team
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
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