The HustleIssue #163Sunday, June 13, 2021Why is lumber is so expensive right now?An illustrated explainer of the factors driving up the market.BY ZACHARY CROCKETTNOTE: Thie week, we&rsquo
Don't Let Contingencies Scare You When Selling Your House
Dated: January 26 2021
Don’t Let Contingent Scare You When Selling Your House
A lot of sellers are afraid of the word “contingent.” The word is scary because it may cause some potential buyers to bid on the home even if their home hasn’t sold yet. After all, the seller wants as close to a sure deal as possible.
Why shouldn’t you be afraid to sell with a contingency attached?
Buyers Understand the Selling Process
Nearly 50% of buyers have owned a previous residence, and a lot of buyers are moving from one home to another. These buyers are sympathetic to you because they know the obstacles that you face when selling a home.
If a buyer makes a bid on the home with the contingency that they’ll make a purchase when their home sells, they’re going to do everything possible to sell their current home.
Sellers Can Still Market the Home
As a seller, you don’t have to stop marketing the home. Stipulations can be put in place that allows you to market the home and receive another offer. If you do receive an offer, the potential buyer can remove their contingency and move forward with the sale.
If the buyer cannot remove the contingency in a specific amount of time, often 24 to 48 hours, the seller returns the earnest money, and the contract is terminated.
When you have the right stipulations in place, you can be sure that a buyer with a contingency attached doesn’t interfere with the potential sale of your home.
Perform Your Due Diligence
You or your real estate agent can reduce your risk of having the home under contract and making it look less appealing to other buyers by reducing your risks. Due diligence will help ensure that the potential buyer has an actual chance to sell their home.
A few key points that you or your real estate agent should look into are:
· Does the buyer already have their home on the market?
· Is the buyer selling the home at a good price? (run comparables on the home)
· How long has the buyer’s home been on the market?
If you know this information, you can always choose to pass on the buyer’s offer. A buyer that has had their home on the market for 100 days and is trying to sell for more than the market value, will be unlikely to sell their home.
Don’t Forget There are Other Types of Contingencies
As a seller, the buyer can have a lot of contingencies that go beyond them selling their home. A few of these contingencies are understandable:
· Inspection. Smart buyers will have a home inspected, and the buyer may have stipulations that certain repairs be made before closing. You can also choose to reduce the selling price or pay part of closing in lieu of making repairs.
· Mortgage. The most common stipulation is the buyer being approved for the mortgage for the home. A mortgage contingency is required even if a person is pre-approved. This is a common practice, and you can reduce your risks somewhat by considering people that have only been pre-approved.
While contingencies can be scary for a seller, there are options and avenues you can take to allow these potential buyers to bid on the home without taking on too much risk.
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