Home Selling in Chicago>Question Details

Holly, Home Seller in Chicago, IL

Can we enter into contracts with multiple parties when both offers have subject to sale contigencies? We

Asked by Holly, Chicago, IL Sun Jun 15, 2008

entered into a contract for the sale of our home that is subject to the buyers selling their condo. We negotiated and executed this via our agent while we were out of the country on vacation. We were aware that during this time, there was another interested party looking at or house. Our agent told us that this second potential buyer stated that they also wanted to write an offer with a subject to sale contingency, but that he told them it wouldn't make sense for us to have 2 such contracts going at the same time - essentially telling them not to make an offer until they sold their home.

What would be the downside for us to enter into 2 such contracts? And shouldn't we have been consulted before our agent told them we wouldn't accept a second contingent offer?

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Answers

7
You can accept one contract, not two. It is customary to deal with the first offer first, trying to get the best terms for you.

A "second potential buyer" is just that. Until the offer is signed and delivered, it means nothing. Take them as a back up or do as your agent advises.
1 vote Thank Flag Link Sun Jun 15, 2008
Hi Holly,
Yes you should definately be consulted for every decision. You can accept a second offer contigent on cancellation of prior contract. If the first "superior"contract sells their home first, no problem, just move to a closing. If the second buyers sell their home first, you will then bump the first contract and give them notice of a better offer and start the clock ticking on whatever kick-out clause you have in their contract.

Jim
0 votes Thank Flag Link Sat Nov 22, 2008
Dear Holly,

I know this answer comes late, but I am new to Trulia Voices within the last 48 hours. I certainly hope that this message finds your house already closed successfully. On the very last question that you asked, your agent has or had an obligation to present to you any and all offers for your property. Even with an obviously inferior and superior offer situation, you as the sellers always have the ability to counter both offers and potentially negotiate better terms (thus making an inferior offer suddenly superior). In a multiple offer scenario such as this one, you should have felt very comfortable moving toward terms most acceptable to you. Given the current market climate and the amount of time that many listings are taking to sell, you'd be wise to keep backup offers around if/when you have them as the backup could have sold their contingent house prior to the primary or accepted contract. Again I hope this message finds your place already successfully closed. If not yet then good luck to you.

Sincerely,

Christopher Thomas
Broker Associate, Sudler Sotheby’s International Realty
1634 E. 53rd St. 2nd Floor Chicago, IL 60615
773-418-0640 (mobile) 312-577-0985 (fax)
Christopher.thomas@sothebysrealty.com
0 votes Thank Flag Link Fri Nov 21, 2008
Holly,

With the first offer being accepted and if you have a "kick out clause", meaning you still have your home on the market and if another offer comes in you can accept it, for any reason that "YOU" feel makes it a better offer then the first offer. Price, closing date or any terms that make it a better offer. If you have the 48 hour or 72 hour kick out clause then the second offer would be contigent on the cancellation of the first offer. Once the first offer is notified that a second offer is accepted then they have that 48 or 72 hours to either drop their congingency or cancel the contract. If the first offer decides to drop the contingency then they're forced to complete the sale. I just have 1 question...who is the agent with the first contract?
0 votes Thank Flag Link Mon Jun 16, 2008
Holly,

You have one accepted offer on the table. The only manner in which you might accept another second offer is if the second offer, cognizant that your first offer contains either a home sale or home close contingency, proffers their offer and waives all contingencies. This includes home sale or close and mortgage contingencies. Upon doing so the typical language of a contingent offer contains "kick out" language whereby the first offer has a pre-determined period of time to leave their contract or waive their contingencies. In this sense the contingent offer has the possibility of becoming what we call a "solid" contract.

The current market has resulted in many more home sale/close contingent contracts being accepted. However, it seems to me few agents on the listing side are familiar with how to maintain leverage in such negotiations. Another thing for all home sellers to be aware of, the prospect of an offer being made provides a wonderful opportunity to create the most propitious environment for your sale. It is incumbent upon a skilled real estate professional to establish as much momentum as possible whereby you gain the most favorable terms either through a multiple offer or inspiring a fence-sitting consumer to make an offer as opposed to continuing to shop. By the same token, I don't want to throw your agent under the bus. Consumers are so geared to looking at so much inventory today that it is entirely likely that they had no intention of losing their leverage by participating in a negotiation with another forthcoming or already received offer.

By the way, with your contingency did your agent think to negotiate your listing remaining active or does it appear in the mls as a contingent offer? Just one measure to ascertain your agent's skill set.

All the best,

Tom McCarey
The Real Estate Lounge Chicago with @properties chicago
0 votes Thank Flag Link Mon Jun 16, 2008
I agree with the statements below about not being able to accept 2 primary offers. If your 1st offer WAS ACCEPTED then I agree that it wouldn't make sense to bump a home sale contingency with another home sale contingency. Our contracts normally get bumped for a lesser contingency. However, if your 1st offer WAS NOT accepted and you were STILL IN negotiations, I would have encouraged the 2nd buyer to write. The 2nd offer could have been at a higher price or the property they needed to sell could have been easier to sell than the 1st offer.

Our clients should definitely be aware and consulted on what is going on with their home. An agent should not make a decision for YOU WITHOUT YOU. Once you understand the pros and cons of each contract, you as a seller are able to make a decision that benefits you.
0 votes Thank Flag Link Mon Jun 16, 2008
Hi Holly:

You can not take two primary offers. There can only be one accepted offer at a time. However, you can always accept a back up offer which will step in shall the first one fails. This will be one of the things I would suggest.

There are also ways to write offers contingent upon the sale of the buyers home with release clause to make it easier for you to accept other offers should another offer comes in without a contingency upon sale of their home.

You should definitely be consulted before your agent told them what to do - it is your house and you have every right to decide whether you want to take a certain offer or not. He should have at least consulted you and explain to you the pros and cons of each and let YOU decide whether YOU want to take the offer or not. Your agent only represents you but he is not you. You get to make an 'educated' decide.

Sylvia
0 votes Thank Flag Link Sun Jun 15, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
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