Tbish774, Home Seller in Indianapolis, IN

We want to sell our house and buy a home that is corporate owned. Will they accept a contingency...?

Asked by Tbish774, Indianapolis, IN Mon Feb 23, 2009

for us selling our house first? A realtor told me they would not even look at the offer! We will sell FSBO, but really want this other house-that is the sole purpose for us putting ours on the market. Since the market is down, I wonder if they would possibly accept this (at least with first rights!)

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Here are a few things to consider. Since we are talkiing about a corporate owned home, whatever they do usually follows some sort of system. It could be a repo, forclosure, corporate buyout, etc. Whatever it may be some corporate entity is doing work on this transaction, Not an individuale. The asset manager may be working on multiple homes at the same time and have managers who are reviewing and approving their transaction work. Whenever you ask to do sopmething outside their normal pattern or system of sales, things become hard to track. So its understandable that "corporate homes" are not very flexable in the way they do things. You refered to a down market. I probably get asked this 100 times a week. There are areas and communities in the Indianapolis market that are doing quite well. It's a mistake to generalize the market and say it's all down. There is excess inventory, but we are a growing region and people are moving here and buying. They home you are interested in may very well be a hot commodity and sell in 30-90 days, so as a seller, you ask yourself, why should I take a contingency? If it looks like you have good odds on selling, and the agent representing the sale will be advising them, why lock yourself into a contingency? Sellers will simply not lock themselves into terms, when other prospects might be better. As a buyer, I might ask you why the heck you want to give them a first right anyway? If you can't buy it before you sell, your first right really does you no good. They might get another offer and then ask you to exercise your first right. Since your home is not sold, you can't buy. Now lets speculate for a moment....Lets say for instance, they agree on a first right at $200k. What happens if no other offers come in and the seller is considering a price reduction. If you have terms already on the table, I doubt there will be movement on pricing. If you had waited in the wings w/o making a first right, you might see better pricing. Another reason they might not consider your offer is with contingencies, they want serious offers. When national statistics point out 80-90% of FSBO's go unsold or don't close, theymessage you are sending to them is your offer might not be that serious. If you are a FSBO, and you are in a slow selling community, the odds of this deal happening are even worse. So if you still want a contingency offer reviewed, how do you go about it? I have had corporate owned homes accept 1st rights. Not easy, but packaged right it can be done. Just realize that you are asking something special from them so they will want something from you in return. They wil be less apt to negotiate on price, they will want good assurance you will be able to sell your home in a reasonable period of time, (they want it with a realtor with good corporate promoitions, pictures, advertising, etc.) They may require earnest money up front. So with all this considered, there are a lot of reasons why 1st rights are not always the best plan. I might suggest you put your home up for sale first, an any buyer that makes an offer, your contingency to them will be that part of the sale will be contingent on your successfully negotiating your next purchase. Gives you the chance to get your home sold and does not tie you to the sale if you cannot come to terms on the corporate home.
Hope this helps. feel free to email me at eric@karrfalt.net if I can help with any more questions. -Eric
1 vote Thank Flag Link Tue Feb 24, 2009
Hi Tbish,

If your Realtor won't present your offer, get another one. So what if they say,
"No"? At least you will have asked. Have you gotten any calls on your current
home? Do you have enough financial flexibility to rent your current home for
a year and buy the home you like so well? The rental income will appear in the asset column instead of the liability column on your loan application. When the market is back up, you could sell the rental.

I've got a Corporate Owned listing right now and the company is dragging their feet behind a market that
has slipped out from under it and yet they have said they would not consider a first right, let alone a
contingency. They didn't want the home, they got stuck with it and the carrying costs. They want someone
to sweep in and buy it. When an F for first right appears after the word active on a listing, many, many
Realtors, who are people persons after all, won't show it. They don't want to break some poor buyer's
heart.

Good Luck,
Marita

Oh, put your home on Craig's List too.
1 vote Thank Flag Link Mon Feb 23, 2009
I would submit an offer anyhow - what is there to lose but time? Put a "48 hour contingency clause" in the offer and maybe they will go for that. What this clause means is that if they find another party who does not have the same contingency (to sell a home), they give you 48 hours to remove your contingency or they will sell to the second party. Once you have secured a buyer, you can remove the contingency to sell and the 48 hour one is automatically removed.
0 votes Thank Flag Link Fri May 25, 2012
You have little to no chance of having your offer seriously considered.. Selling FSBO will only make it less likely. Your logic won't impress the sellers.

You will probably need to sell you home first or arrange for a mortgage before your home sells.
0 votes Thank Flag Link Fri May 25, 2012
I put your chances of a contingency sale without special compensation at little to none. On the other hand lets look at the banks point of view. That is money and nothing else. So offer them a non refundable earnest money deposit to give you 90 days to sell your home. Lets say 10% of purchase price. The processor would be negligent not to respond to that kind of offer. Remember you are asking them to take thier home off the market and wait for you. If you list your home then 5% may be enough to get a favorable responce. The key here is non refundable.
0 votes Thank Flag Link Wed Jul 14, 2010
First things first. You must list your house with a realtor! The honest truth is that most agent will not show their clients a FSBO, and FSBO's do not show up on Realtor search database, so they don't know about it to show, so your odds of selling are slim to none. If you sole purpose in selling your home is to get this other house and you don't want to sell otherwise, you run the risk of your house being sold and you not being able to make a deal on this other house. Corp homes are tricky, but a good agent can make the deal. Most likely their will be a standard policy to not accept contingencies, but you can always ask. Email me if you have questions, or I can be of assistance. Pamh@talktotucker.com
0 votes Thank Flag Link Wed Jul 14, 2010
A lot of my listings are corporate owned, meaning relocation companies, not banks. We've received contingent offers and none have ever been accepted by the relo companies. Most have policies against them. They also will not rent, do land contracts, etc.

Relo homes are amongst the best deals in any market. They are usually in very good condition and priced very well. I imagine you can get a very good deal on that house.

Have your agent submit your offer to find out, but have a plan B. I would suggest that if you really want the house, you consider listing yours with a Realtor to increase your exposure. Yes, it will cost you something, but you will probably net more and you are going to make it up on the other end with your purchase of the relo house. If the Realtor can't sell your house, then you are not moving, but you will know you gave it your best shot.

Good luck.
Web Reference: http://miOaklandCounty.com
0 votes Thank Flag Link Tue Feb 24, 2009
Maureen Fran…, Real Estate Pro in Birmingham, MI
MVP'08
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Your best bet to is let the real estate agent listing the corporate owned house know that you are interested in making an offer, but first need to sell your home. Most agents will let you know if there's an offer on a property, and you can make a decision at that point whether you want to buy the house before yours is sold. I'd recommend if you really want to buy this house to get your lists with a real estate agent and priced aggressively for a quicker sale. Good luck.
Laura
0 votes Thank Flag Link Tue Feb 24, 2009
First, the term "Corporate Owned" can mean many different things. It always means that it is under the control of a corporation, whether that be a relocation company; a lending institution, etc.; rather than an individual. Your chance of an offer being accepted with any type of contingency on a corporate owned home is virtually zero!

With that being said, I am going to take this opportunity to address something that I am seeing more and more recently. That being, I see both the buyers and some of the agents representing them perplexing over whether a seller would accept an offer, and never making one. The only way you will know, is to submit an offer and start a dialogue.
0 votes Thank Flag Link Mon Feb 23, 2009
The home we are looking at is "CORPORATE OWNED" which means the previous owners got transferred and their company bought it. It has been on the market for almost a year now and drastically reduced over the past year! It is not a foreclosure. We love the LOCATION and that is why we want to sell our home now to get this one. We will definitely get a good deal on this new home but understand we might have to take a loss on our current one due to the market. But hopefully when the market goes back to normal we will feel good about this purchase even more as home prices stabilize. We are currently doing FSBO, realtor.com, and just beginning our marketing on our current home. We are afraid that the other home will sell before we get ours sold (which had happened to us before, and that is why we settled for the house we are currently in).
0 votes Thank Flag Link Mon Feb 23, 2009
My experience is that sellers of corporate owned properties will only consider a home to close contingency meaning that the home is under contract and is waiting to close.
Web Reference: http://www.petemcmahon.com
0 votes Thank Flag Link Mon Feb 23, 2009
Tbish,

It is highly unlikely your offer will be given any serious consideration.
If what you mean by "corporate owned" id a "foreclosure," the bank owners are in positions of needing to move these properties ASAP and steer a very wide circle around "contingencies."

Our advice is to price your home to sell as a reflection of the current local market conditions and implement an aggressive comprehensive marketing plan including local and internet iniatives.

Good luck
0 votes Thank Flag Link Mon Feb 23, 2009
In my experience listing corporate owned properties, you heard correctly. I am not aware of any company that will consider a contingency to sell a home. They may accept a contingency if your home is already under contract and you are just waiting to close.
0 votes Thank Flag Link Mon Feb 23, 2009
Hi Tbish774,

The bank will consider that the same market conditions affecting the sale
of their property will also affect the sale of yours. Why is that home so
important? What makes it the only reason you want to sell? Perhaps if there's one, there will be another.
To move forward you have to put your home on the market first. And a banker will consider a FSBO situation
the least desireable marketing circumstance. But.....

You are between a rock and a hard place. Banks will not take contingencies anyway. And I've never seen
a bank take a first right. Banks are not holding companies and they are lousy property managers.

By the way, how much were you going to offer, just out of curiosity? Did you know that banks typically bring
a foreclosure to market 10% - 20% under appraised value? Perhaps you could discount your current home
when you bring it to market, so it will sell faster. Also, Realtors' Broker's Cooperative sites, MIBOR in Indy,
provide mammoth advertising. If you go FSBO, you've got to go all out on your advertising.

Good Luck,

Marita Topmiller
Assoc Broker/ Realtor
0 votes Thank Flag Link Mon Feb 23, 2009
Unfortunately, the banks will not even look at contingencies, even in a buyers market like we're in now.
0 votes Thank Flag Link Mon Feb 23, 2009
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