# Buying a home contingent upon selling existing home



## Huntmo1

Has anyone ever been through this before? There is a really nice farmhouse that is 4-5 miles away from where I currently live that I would love to buy. However, I own my current home and would need to sell it. I know that it is possible to put in an offer to buy with the caveat that it is contingent upon me selling my own home first...but, I just wanted to find out if anyone on here as done this before and if you have any comments, recommendations, advice, etc.,

Thanks!


----------



## powerdam1953

You can do that, but ask about the laws, some places, a contingency offer like that is only good if the owner doesn't get a cash offer or a quicker to settlement offer. The realtor would know. I have been on both sides of this and I think it's better to sell yours first so you know what you have to deal with.


----------



## oregon woodsmok

It used to be done routinely.

Now, with the market slow, sellers are reluctant to accept an offer contingent upon the sale of a different house that might never sell. If nothing else, your offer would be stronger if your house was already in escrow and your offer were contingent upon your escrow closing.

However, you can certainly try it and see what the seller does. If he has been waiting along time to sell, he might accept your offer. Especially if you price your own home low and don't think you can hold out for top dollar.


----------



## RonM

A few get sold around here with that contingency.....make sure it is in writing......


----------



## Narshalla

You can try it, but in this market, the seller isn't going to agree.


----------



## ChristieAcres

As an Agent, I have written Offers contingent upon selling a home. Some Sellers will accept, others won't. What have you got to lose? Everyone has their own opinions on using a Realtor. I recommend you do. If not, use a Real Estate Attorney.


----------



## katydidagain

As long as you understand that your offer can and may be kicked out if someone else comes along and writes a contract (even at a lesser price) before you sell your home, then there's no problem. Basically all you're doing is expressing an interest in purchasing the property and nothing more.


----------



## ChristieAcres

katydidagain said:


> As long as you understand that your offer can and may be kicked out if someone else comes along and writes a contract (even at a lesser price) before you sell your home, then there's no problem. Basically all you're doing is expressing an interest in purchasing the property and nothing more.


As an Agent, I don't write Offers contingent upon house sales, with that allowed. If the Contract is written to prohibit other Offers, you can absolutely write a standing Offer contingent upon your house selling. Most include allowing for a period of time for that to occur. I even negotiated that type of offer to require a "Pending Sale" status on the NWMLS. The Buyer's home did sell and they are happily living in the home they purchased. 

Since I also deal with Short Sales, the Offers always require no other Offers can be entertained to bump my Buyers'.


----------



## nancy237

I am selling and buying also right now..
It will depend on whether the 
sellers think its the best offer they may get.
You have no way to know except to try..
Make your offer as strong as you can in other ways.

Can you find out how long it has been on the market.
If its been there a long time that works in your favor.


----------



## katydidagain

lorichristie said:


> As an Agent, I don't write Offers contingent upon house sales, with that allowed. If the Contract is written to prohibit other Offers, you can absolutely write a standing Offer contingent upon your house selling. Most include allowing for a period of time for that to occur. I even negotiated that type of offer to require a "Pending Sale" status on the NWMLS. The Buyer's home did sell and they are happily living in the home they purchased.
> 
> Since I also deal with Short Sales, the Offers always require no other Offers can be entertained to bump my Buyers'.


If I were a seller, I would absolutely not tie up my property in that manner. When I sold RE, I did write contingent offers that could be kicked out. If another contract came in, the original buyer had the right to remove the contingency or walk away. Of course, when I sold RE in the 70s, there were no buyer's agents--we all worked for the seller.


----------



## wharton

As a builder who sells several homes a year, I have really gotten burned by this ONCE. There won't be a second time. If I were to agree to another one it would be under three exceptionally clear terms. 
#1 The buyer submits a 5% non refundable deposit. Iron clad, no out clauses, the buyer fails to close for any reason, the money is mine. If you do this, as a seller, you need to be careful, some brokers use contract language that gives them the right to keep deposits to cover their lost commision.
#2 There is a 72 hour kick out clause. If the property gets another acceptable offer, while theoriginal buyer is waiting to sell their home, the original buyer has 72 hours to come to the table and settle, or their contract is voided.
#3 Most important, the property continues to be agressively marketed, in order to find other buyers.
In this market, agents and buyers waste no time on properties listed as, "taking back-up offers". If you are a seller, willing to accept a contigent sale, do not let your property become unmarketable because the selling agent either takes it off the market, or is hoping for better back-up offers.


----------



## ChristieAcres

When properties sit for often a year with no offers, the Sellers are far more willing to negotiate to accommodate a Buyer, and I don't represent Buyers who makes offers like that without being very confident their homes will sell quickly. I have 100% Closings on those! Also, I have made "back up offers," and my Clients were happy when theirs were accepted due to the original Offer not working out.

I have also been the Listing Agent, who didn't accept Offers with home sales as contingencies (my Sellers didn't want them). It is all about meeting the needs of my Clients, Buyers or Sellers!


----------



## mountainwmn

I actually just did this friday. Every area may be different but this is what my realtor explained to me. Typically if you put in an offer based on the sale and settlement of your home the seller still is able to market their home. If they like your offer they lose nothing by waiting for your home to sell. If they have another offer they have to give you notice and if you do not have an agreement of sale they give you back your deposit and you start looking at houses again. 
My realtor says its very common here and that it can be a huge chain of sales waiting for the last one and they all close the same day. 

I would get a realtor for this if you aren't working with one already.


----------



## wharton

mountainwmn said:


> I actually just did this friday. Every area may be different but this is what my realtor explained to me. Typically if you put in an offer based on the sale and settlement of your home the seller still is able to market their home. If they like your offer they lose nothing by waiting for your home to sell. If they have another offer they have to give you notice and if you do not have an agreement of sale they give you back your deposit and you start looking at houses again.
> My realtor says its very common here and that it can be a huge chain of sales waiting for the last one and they all close the same day.
> 
> I would get a realtor for this if you aren't working with one already.


 Not to be too cynical here, but I've been in this business for a long time now, and I would really need to see some proof before I bought a lot of what your realtor claims. I have never seen a market when contingency sales are "very common" or so prevalent that they are waiting like planes stacked up to land at a busy airport, on "closing day". From a seller's perspective, unless you have a clear easy out clause, and the home continues to be listed and marketed agressively, there are few benefits to this, unless like lorichristie says, the market is nearly dead, and a marginal, likely to fail, offer is better than none at all. Hate to be negative, but realistically I doubt I would ever agree to another one, and I sell several homes a year. The contingency sale represents to me a lot of what's wrong with our mentality in this country, as in "I deserve it, and I want it NOW". Bottom line, IMHO, is that far too many people end up attempting to buy homes when they really shouldn't be. I would like to see us return to the point where you NEED 20% down, where debt/income levels as a mortgage requirement are far more conservative. I know that there are legitimate reasons for a limited number of contingency sales, but as a seller, I still believe that they are best avoided.


----------



## Narshalla

wharton said:


> Not to be too cynical here, but I've been in this business for a long time now, and I would really need to see some proof before I bought a lot of what your realtor claims. I have never seen a market when contingency sales are "very common" or so prevalent that they are waiting like planes stacked up to land at a busy airport, on "closing day". From a seller's perspective, unless you have a clear easy out clause, and the home continues to be listed and marketed agressively, there are few benefits to this, unless like lorichristie says, the market is nearly dead, and a marginal, likely to fail, offer is better than none at all. Hate to be negative, but realistically I doubt I would ever agree to another one, and I sell several homes a year. The contingency sale represents to me a lot of what's wrong with our mentality in this country, as in "I deserve it, and I want it NOW". Bottom line, IMHO, is that far too many people end up attempting to buy homes when they really shouldn't be. I would like to see us return to the point where you NEED 20% down, where debt/income levels as a mortgage requirement are far more conservative. I know that there are legitimate reasons for a limited number of contingency sales, but as a seller, I still believe that they are best avoided.


Seven to fifteen years ago in California, Miami, or Las Vegas, yes, I could see this happening.


----------



## mountainwmn

I guess thats kind of the point though. If the seller gets another offer that is not contingent on the sale of a home they have to give (in my case 24 hours) notice. If I don't have a buyer or a mortgage by then, I'm out of the game. But they can't drop me for someone else that has to wait to sell their house.
I wanted to put an offer on this house before I even listed my house but they already had an offer contingent on them selling their house. They may not want to do it again, as I haven't heard back from them. 
It works for them since they can continue to market and it's their choice if they want to wait on me or take a better offer. And it works for me because if I get an offer I know exactly how low I can go....and that I will have a place to go at closing. 

I can't say for sure or give you stats, I'm not a realtor. But if mine is the second offer this house has had like this it can't be too uncommon here. I do trust my realtor though. And I asked her about an offer that would like them in to me no matter how long it took to sell my house. She said it can be done but I have a better chance of seeing snow in july than them accepting that.


----------



## wharton

Narshalla said:


> Seven to fifteen years ago in California, Miami, or Las Vegas, yes, I could see this happening.


 No doubt you are correct on that. Sadly, there will never be the legitimate reforms necessary to correct the market and prevent the stupidity we witnessed over the last five years. Until we get Fannie and Freddie out of the game, set much higher, non negotiable down payments, and start acting rationally again, we are going to see this stupidity of explosive home prices, and bubbles. It's hard to believe, for a lot of us living in hard hit areas, but the out of control stupidy is cranking up in some places in our country already. I have a wealthy friend from California. He just lost out on his third attempt to buy a home in the Truckee area. Outbid on the first two, he offered asking on the third. He was the fifth highest offer. The house was a $340K foreclosure.......now that's screwed up.


----------



## ChristieAcres

House sale contingent offers are usually a waste of paper UNLESS, the Seller agrees to update the status ad as pending, and not entertain other offers. That is the only way I will write offers, but I also need to be confident my Buyers stand a likelihood of selling their home relatively quickly. Wharton is posting excellent advice!


----------

