This is Roxanne DeBerry with Keller Williams Realty. No, realtors are not usually opposed to contigency contracts. However, sellers may be. When you have a contingency contract it shows up on the MLS system and this may disuade buyers from looking at the property once they know it exists. So sellers don't want to take the chance of missing someone who can buy their house right now. A contingency contract may give the person who has it the right of first refusal, so that means that another buyer might lose out if you are able to go through with the sale. Sellers are in control of the type of offer they will accept.
I have had sellers that would take a contingency contract especially when they felt they had ample time to move, but those who are looking to move within a short period of time usually won't consider a contigency. I suggest that you go ahead and put your home on the market and while it is being marketed, go ahead and start looking for a home. Our team actually has two people that works with you. A listing specialist who markets your home and then a buyers agent that works with you to preview homes and help you with the purchase as soon as your home sells. If you would like to speak to me about assisting you or answer any of your questions, please call me at 214-676-8040 and I will be happy to help you.
I don't believe that realtors in general are reluctant to work with contingent contracts. They just present more challenges to both the buyer and seller whose interest the agents represent. There are agents who may choose not to work with you as a business decision because your transactions will take more time with an increased risk that you will never buy or sell a property. The agent's profitability is reduced because of the time factor and their risk of never getting paid at all goes up dramatically. "Just looking" is an expensive proposition for an agent.
A contract with a contingency to sell another property will take longer to close and has a greater chance of falling out due to the sale of the other property. To accept a contract with a contingency, the seller essentially takes their house off the market. The listing changes to Active Contingent or Active Knockout* in MLS. Many agents will not present these listings to their buyers because they are possibly not available. As an agent, you don't want your buyer to fall in love with a property when there is already a contract in place. Since the listing will get very few showings under a contingent status, the opportunity to market the home to other buyers diminishes dramatically. And because the seller is taking a greater risk, they usually expect to be compensated for that risk by getting a higher sales price for their property. They aren't likely to negotiate on price and be willing to wait around to see if your house sells too. If they are motivated to sell, they are better off reducing their price for a non-contingent contract.
From your perspective as a buyer, your negotiating position is weak. From your perspective as a seller, you will feel more pressure to accept a lower offer on your current property so that you can move on. This is a buyer's market and even with pricing your current home "to sell" it may still take 60 to 90 days. There are many other variables involved in selling a property including location, condition, and features. Pricing is just the first step. You will also have to view more homes to find the seller who will agree to work with a contingency and your choice of homes will be smaller.
On the other hand, if you want to be in control of your move, try this route. Consult with an agent about your property. Get it prepared, repaired, updated, staged and priced to sell. With your agent's assistance, figure out what you want in your new home. Determine where you want to be and how many homes are available that fit your needs. Next, get your home on the market. You are now in the stronger negotiating position to sell your home. You don't have to accept the first offer that comes in. Negotiate a longer closing date for the contract to sell your home or better still, include a leaseback period so that you can close on your current home, get the proceeds in the bank and be ready to close on your new home later. You're now in a stronger position to negotiate the deal on your new house.
Let's see....buyers market, spring time inventory, your house under contract so you can pounce on your choice of any home from a strong negotiating position and request that the seller be out by the end of your leaseback vs. contingent offer, fewer homes to pick from, zero negotiating power and your house isn't even on the market.
* A Knockout is a contract that gives the seller the right to ask the buyer to remove their contingency or release the seller from the contract within a specified time (Usually 48 hours or so) if the seller receives a better offer from another buyer. Sellers are more likely to agree to this type of contingency because they increase their odds of selling the property.
Realtors truly should be a reflection of the people they represent, sellers or buyers. If the seller is reluctant to wait out a contingent sale, then the Realtor should be also.
In your situation you should be looking for a seller that is not anxious to get out (priced to sell, etc) in order to allow you time to find a buyer. If the seller reluctantly accepts your offer and then finds a non-contingent buyer, you will get time to remove the contingency.
The contingency can be removed either by finding a buyer for your old house or simply by qualifying (paying) for the new house while the old one is still on the market. You can also try to enlist the cooperation of the seller if you need just another couple of weeks to close the deal on your old house. Most people are willing to give that, some even more, but don't count on it.
There are times when a contingent contract will work out perfectly for buyer and seller. Case in point, I have a selling client who is a school teacher. She would really like to move out of her home during a school break. For this type of seller, time is not of the essence. The timing of a sale is what works for buyer and seller. We agents are merely the facilitators of the event. The worst someone can say to a contingent offer is 'no'. It is worth a try. Even if the seller initially says 'no', I've seen times where they seek you back out later on when they've had a few lowball offers and realize your contingency isn't the worst thing they might encounter.
We can and do, but it depends on the seller.
My advice in this market is get a contract on your home first.
Once you get a contract then start shopping.
Otherwise you can waste a lot of time and money, if your house doesn't sell and it keeps you from buying the new one.
Is yours listed yet? That's typically one thing people want to see when they get a contingency contract.
The other question to think about is will you take a contingency contract on yours and under what conditions?
That might help you think about what you need to do to make the seller of your purchase comfortable with your offer?
William Davis Realty
If you are talking about a traditional sale, when you are negotiating with the owners-sellers, they might be very receptive to your offer (it is not the agent who makes a decision, it is the seller) as long as you would be able to demonstrate to them that you are making realistic steps towards selling of your home (e.g.: hired a realtor, priced your home competitively, etc).
However, if you are interested in buying a short sale or a bank owned property, based on my experience, the lenders and banks do not approve and/or accept offers with a home sale contingency. It is usually specified in the listing details of REO properties and short sales. Do not get discouraged, let your agent find and negotiate you a good deal among owner occupied properties.
All the best.
Yes reason why it can take awhile for a home to sale, contigency contract if I were listing agent would have so many terms in there in order accept the contract. Best sale your home then search you could lose your escrow money.
Contact my office if I can assist