Offering to buy, when it is under contingent contract
turtleshope
12 years ago
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jakabedy
12 years agoRelated Discussions
Putting a contract on a home with contingency?
Comments (5)I meant refinance my new home with the proceeds from the sell of my current home. This way we have lower monthly payments and more equity in our home. The largest factor is getting our house payments to a reasonable level. We don't want to continue paying high house payments if we have a large sum that could be applied towards our new home to lower them. We're considering 2 options should they release the contingency. Option 1 is that prior to putting our home on the market we do a home equity loan/line of credit. We then would take those funds and apply for a conventional loan with the downpayment we expected. Then we would put our current home on the market. Worst case scenario here is that we pay mortgages on our current home until it sells, mortgages on our new home after closing, and interest payments on our home equity loan/line of credit until our current home sells. Which is better...equity loan (prepayment penalites), or equity line of credit (higher interest). Option 2 (less favorable)- would be to finance new home with a VA/0 Down Loan. Prior to putting current home on market, take out equity line of credit in the event we need the money to make house payments. Then put current home on market. After current home sells, refinance new home to put proceeds towards mortgage and lower montly payments. Worst case scenario is that we pay high payments on new home, regular mortgage on current home until it sells, and have to wait 6 months before we refinance (plus add the cost of refinancing). I think we are leaning towards option 1. Can anyone lend some insight?...See MoreFSBO-- downsides of accepting contingency offer?
Comments (25)I'll stick my nose in one more time...just to say that I agree with ncrealestateguy's last comment. JMO: Legal or not, one should "Do to others whatever you would like them to do to you". And to comment on treepinktree's last post - yes, I agree that commission is really lots of $$$. Depending on situation, that 16k spent could save lots of headaches and possibly $$$ too. You realize that Agent has lots in stake - if he/she sells the house, gets paid. Otherwise, no income. That is pretty good reason to 'work the listing', I think. And, most agents do this full time unlike homeowner that probably has to work his/her job. I am not at all against FSBO, just would seriously consider all options, and choose depending on market conditions and my own situation. And my own confidence - do I know answers to legal questions? Am I good negotiator? Could I look at my property realistically? Often, we may feel that our house is better than other, or may be emotional when it comes to other's opinion about our home. No disrespect to any of the opinions here. I find buying/selling homes very interesting subject and experience. And, that is most likely biggest purchase one makes, so one has to be careful. Again, I am sure it's very different in US than in Canada. And yes, I have sold & bought few houses and condo apartments in my life. We still have very active market-just sold house in 5 days & received more than 100k over the asking (approx. 17% more). Asking price was realistic. Just that kind of market we have here....See MoreContigency offer...their house is under contract
Comments (12)your situation is that the buyer's home is already under contract and is scheduled to close in weeks. that is a lot better situation for you compared to buyer simply placing their home on the market. They already have a buyer. Now it is just a matter of the sale going through. what are the chances that the deal falls through...maybe 35% chance it falls through? I normally don't like a contingnecy. However, in your situation, it is only 6 weeks away and there is already a contract on the home in question. I would go with it if i was in your shoes. You can schedule closing for your place for the day after closing for the buyers's home. Worse case, the buyers sale falls through. This could occur in a week or in 6 weeks. But there is better than 50% chance that the buyers sale does NOT fall through. Also keep in mind if you decide to reject this offer, then any future buyers might have issues that cause your sale to fall through, even if there is no home sale contingency. In your case, I would go with the bird in the hand and take the risk and plan your closing 6 weeks out. the only reason I suggest this is because they already have a buyer and a scheduled closing date. This is HUGE....See MoreOffer contingent on sale of their home ?
Comments (13)We just closed on 2 homes Tuesday. I'll summarize what happened with us. After looking for 7 months we found new construction in August. We bought a house that was already spec'd out, permits pulled, house had not gone up yet. February comes, house supposedly has 1 month to go. Get offers, couldn't work one, 2nd we were working when a 3rd came in. Accepted #3 due to type of loan, they pulled out during attorney review. Buyer 2 came back, wanted a 3 month close we said no. We wanted a 30 day close but met in the middle with 60. Attorney review, then inspection. They had 5 days to give us their fix list and didn't. Day 6 our agent calls to get the list. We fixed one safety related item (flue on new furnace) & was going to try to work on 3 things by getting estimates. If they were in a certain dollar amount we'd attempt to fix or credit. Buyer got married went on honeymoon, no contact for 2 weeks. After a misunderstanding by my agent (he thought we were fixing 3 things) we were then committed to doing something. At this point, we were called to closing on the new house and if we did not close would be charged almost $200 per day. A week before closing (which is now week 7) the buyers started making phone calls to contractors & township about permits. By a few days before closing at a few hours after business close at the start of a national holiday we get a call that they'd changed their mind about what was verbally agreed on. At this point we were being charged per day, had utilities scheduled to go off, daughter was signed out of school and we had most of our life packed. Tuesday morning the buyer walked through we were still being moved out. When hubby left for closing (I was still with movers) we still didn't know if we'd have issues or not. Since the title company already wrote up what they'd agreed to, it could not be changed without changing the close date. Thankfully they said ok. It's a domino effect. If either your buyer has issues selling their house or you have issues with the house you are buying one may not close when it is supposed to. Thankfully our buyer did not have a house to sell, but that could have worked against us as well. The amount of earnest money we had ($1,000) wouldn't have helped us much at that (closing day) point because we were on day 4 of not closing on our new house. It was also so small they could easily walk away while we'd lose our $15,000 deposit on the new place. Our new house would have gone on the market, and from what I understand, we'd get charged and price decreases so we had a lot to lose. As for being a buyer looking at a house with a contingency, I liked one house that was under contract (of course) but it didn't fall through. Since the type of house I wanted was very specific, I would have looked at one if I liked what I saw, if there was nothing special about the house, no. Why fall in love with a house you probably can't have? The other thing about earnest money, if you have anything more then a 30 day close and something happens, it's possible your selling season is over, which is what we would have probably been looking at had we not closed. Last year our market was from February until a few weeks after Memorial weekend. The young local couple who looked at our home yesterday (they are our 3rd 'lookers' if you count the 'crazy' no-shoes lady) are interested but didn't want to make a formal written offer until they knew we would consider a contingency that their town home sells first. They are listing it this weekend and I don't expect that it would take more than a month for them to get it sold. I told my agent that yes, we'd consider it as long as the offer was a good one. I don't see why not? It was a brief conversation with our agent, so I don't yet know all the ins and outs of such a contingency. But he did say that we could put a 30 day limit on it and make sure that they had mortgage pre-approval. He also said he'd take a look at their town home to evaluate it's sell-ability (but he didn't anticipate a problem with that since so many people are in need of housing here). If it was me, I would ask they list their house 1st and come back in a week or 2 after seeing how much action they get once listed. In most areas, condos and town homes are not selling. There was a post on citydata by one person who was listed about a year. If you go to the real estate section there, you can find lots of posts from others not able to sell. Ask your agent how desirable town homes are in their area. Good luck & congrats on receiving an offer. Sorry for the book....See MoreUser
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