Contingent vs. Non-Contingent On Sale of One's Home- Other's Experiences?

[Anonymous]

Getting ready to bid on a house but making it contingent on the sale of ours. While we know this doesn't make us as competitive, we are nervous to waive it in case our current places sits on the market. Plus, we would need to borrow money from parents (which they are willing to do) to make up the difference in what we have in cash and the required 20% down. We are feverishly trying to get our house ready to list (two young kids and jobs make it hard to get it all done but getting closer). Would love to hear how others handled this dilemma. Our sense is that there aren't other offers on the table but one never knows what will happen or whether they will get a non-contingent in a few weeks......

[Anonymous]

If it is in a hot neighborhood, they will not accept your offer.

[Anonymous]

You sound like you need to sell first, and then get a long rentback period. A home sale contingency plus a gift letter for the down payment does not offer the sellers much confidence, even if you are the only offer. May I ask around what area and price range you're looking to buy?

[Anonymous]

We waited until our house was under contract. We put in an offer on a house with the contingency of our house closing and it was accepted. So, my advice would be to wait until you at least have your house under contract. Plus, then you will know how much money you will get our of your house.

[Anonymous]

I think sellers have a somewhat irrational bias against contingent offers. Last summer, we made a contingent offer (1.25 million) on a house in McLean that had been sitting on the market for 1.3 million. The sellers didn't even consider it. Half a year later, the house sold for 1.1 million. The irony is that houses in our current neighborhood have been selling within a few days, without an open house. So if the sellers had accepted our offer, they would have done much better from any point of view.

[Anonymous]

We were able to do a home sale contingency, but only because everyone knew our old house would sell quickly. The seller's agent initially said they wouldn't accept any home sale contingencies, but then when he heard details about our house he said they would consider it. It was in a hotter price range/location than the house we bought, which was also competitive. We received 5 offers within 2 days of our old house going on the market. We won out over 3 other offers on the new house - I think mostly based on offer price.

[Anonymous]

Anonymous wrote:I think sellers have a somewhat irrational bias against contingent offers. Last summer, we made a contingent offer (1.25 million) on a house in McLean that had been sitting on the market for 1.3 million. The sellers didn't even consider it. Half a year later, the house sold for 1.1 million. The irony is that houses in our current neighborhood have been selling within a few days, without an open house. So if the sellers had accepted our offer, they would have done much better from any point of view.

It's not irrational. No one wants to take on the risk of waiting for a contingency to be removed. The goal is to close and complete the transaction. $1.25 million means nothing if it doesn't go to close.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think sellers have a somewhat irrational bias against contingent offers. Last summer, we made a contingent offer (1.25 million) on a house in McLean that had been sitting on the market for 1.3 million. The sellers didn't even consider it. Half a year later, the house sold for 1.1 million. The irony is that houses in our current neighborhood have been selling within a few days, without an open house. So if the sellers had accepted our offer, they would have done much better from any point of view.

It's not irrational. No one wants to take on the risk of waiting for a contingency to be removed. The goal is to close and complete the transaction. $1.25 million means nothing if it doesn't go to close.

It depends on the level of risk involved, of course. In this particular case, the risk was low: our house (in a much hotter market segment) would have sold in a few days, similarly to other houses in the neighborhood (there was a very recent comp that sold within 2 days for the asking price).

At any rate, the cost of not taking the risk was 150k and extra six months of keeping the house on the market.

[REALTOR4U]

Home sale contingent offers are difficult to get accepted. You would be better off getting your home under contract and include a home of choice contingency. Once the contingencies are removed on your sale, you could move forward with your new purchase based solely upon the settlement of your home. Better yet, go to settlement and take a rent back from the buyer(s). If you must do a home sale contingent offer, be sure to include the information to show your home should sell in a timely manner. Know the statistics for the community. The sellers would expect your home to be put on the market within days.

[Anonymous]

This past spring, our home sale contingency was accepted. The two things that I think worked most in our favor: a) we offered $50K more than the asking price and b) we said that our house (in a pretty desirable albeit over-priced neighborhood) would be under contract w/in 2 weeks or they could withdraw their acceptance of our offer. These were extreme measures but we *really* liked the house and knew that our home sale contingency and modest earnest money would make us less appealing than other bids. I think that our realtor was as surprised as we were when the offer was accepted! We were reasonably confident about the sale of our home but that was still a very stressful 2 weeks! Our sellers admitted at closing that they were very nervous about our home sale contingency and breathed a huge sigh of relief when they heard we had closed on the sale of our house a few days prior. At times, I want to kick myself for offering $50K more than the asking price but we really wanted this house and knew that our home sale contingency was a huge liability when making offers. Now that all of this is behind us, I think it was a good strategy under the circumstances.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think sellers have a somewhat irrational bias against contingent offers. Last summer, we made a contingent offer (1.25 million) on a house in McLean that had been sitting on the market for 1.3 million. The sellers didn't even consider it. Half a year later, the house sold for 1.1 million. The irony is that houses in our current neighborhood have been selling within a few days, without an open house. So if the sellers had accepted our offer, they would have done much better from any point of view.

It's not irrational. No one wants to take on the risk of waiting for a contingency to be removed. The goal is to close and complete the transaction. $1.25 million means nothing if it doesn't go to close.

It depends on the level of risk involved, of course. In this particular case, the risk was low: our house (in a much hotter market segment) would have sold in a few days, similarly to other houses in the neighborhood (there was a very recent comp that sold within 2 days for the asking price).

At any rate, the cost of not taking the risk was 150k and extra six months of keeping the house on the market.

If the risk is low to you, why not just take on the risk yourself and make your offer that much more attractive. This is the art of negotiations - finding the configuration that represents the most value gained for both parties. Reducing your own risk by a small amount while greatly increasing the perceived risk of the other party is not a good way to negotiate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think sellers have a somewhat irrational bias against contingent offers. Last summer, we made a contingent offer (1.25 million) on a house in McLean that had been sitting on the market for 1.3 million. The sellers didn't even consider it. Half a year later, the house sold for 1.1 million. The irony is that houses in our current neighborhood have been selling within a few days, without an open house. So if the sellers had accepted our offer, they would have done much better from any point of view.

It's not irrational. No one wants to take on the risk of waiting for a contingency to be removed. The goal is to close and complete the transaction. $1.25 million means nothing if it doesn't go to close.

It depends on the level of risk involved, of course. In this particular case, the risk was low: our house (in a much hotter market segment) would have sold in a few days, similarly to other houses in the neighborhood (there was a very recent comp that sold within 2 days for the asking price).

At any rate, the cost of not taking the risk was 150k and extra six months of keeping the house on the market.

I gotta ask: why didn't you list your house, go under contract, and then resubmit your offer on the house? You say it sat for 6mos after...

[Anonymous]

We bought a place this summer and saw a lot of houses in which the sellers openly stated in their listings they would not consider an offer with a home sale contingency. There's nothing to lose in making an offer, but I would think the fact that your place is not even listed yet will make the offer a much harder sell.

We also have 2 kids and jobs and it was really hard to get our place ready to list, so I feel you. In the end it took DH taking almost a week off from work and me taking the kids out of town for a long weekend. We didn't make any offers until our place was under contract. The house we bought accepted our offer which was contingent on our closing but that was largely bc we had a really strong buyer and our closing took place well in advance of the sellers' desired closing date.

I agree with PP that your best bet is to get your place listed and hope you get a long rent-back. Our realtor convinced us that this was the best scenario for us and it absolutely was. Good luck OP!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think sellers have a somewhat irrational bias against contingent offers. Last summer, we made a contingent offer (1.25 million) on a house in McLean that had been sitting on the market for 1.3 million. The sellers didn't even consider it. Half a year later, the house sold for 1.1 million. The irony is that houses in our current neighborhood have been selling within a few days, without an open house. So if the sellers had accepted our offer, they would have done much better from any point of view.

It's not irrational. No one wants to take on the risk of waiting for a contingency to be removed. The goal is to close and complete the transaction. $1.25 million means nothing if it doesn't go to close.

It depends on the level of risk involved, of course. In this particular case, the risk was low: our house (in a much hotter market segment) would have sold in a few days, similarly to other houses in the neighborhood (there was a very recent comp that sold within 2 days for the asking price).

At any rate, the cost of not taking the risk was 150k and extra six months of keeping the house on the market.

I gotta ask: why didn't you list your house, go under contract, and then resubmit your offer on the house? You say it sat for 6mos after...

Because while we liked the house, we didn't think it was worth the hassle. And was annoyed that the sellers had overpriced it so much (I actually predicted quite well what it would eventually sell for)