The thought of ever recommending a seller client accept an offer contingent upon the sale of another property is just down right foolish. I don't care what kind of market it is either...seller's, buyer's, or neutral - it makes no difference. It doesn't matter if the offer is full price either. An offer contingent on another property selling means one thing - YOU LOSE CONTROL OF THE PROCESS!! With no guarantees of anything.
How do you know that the contingent home is priced properly? What if it isn't and the seller does not reduce the price? Are you beginning to see the picture clearly here? When you accept a home sale contingency you have taken your home off the market and are at the mercy of the contingent home selling.
What is even more amusing is when an agent presents an offer with a home sale contingency that is rejected and proceeds to ask if my seller client would accept a right of 1st refusal instead?
I find that many agents don't even truly understand what a right of 1st refusal is? When you allow a buyer that can't purchase a home without selling theirs(contingent sale) to have a right of 1st refusal you are doing the seller a tremendous disservice.
If I am marketing a home and a legitimate buyer comes along that wants to purchase this home I don't want to cloud the negotiations by telling them we must wait 24-48 hours(the typical time allowed) to give another buyer their "1st right of refusal". Why on earth would I want to have to call another buyer who doesn't qualify to purchase the house to ask them if they would like to exercise their "right of 1st refusal"? This is pointless waste of time. I have found that there are agents that will allow this because it gives them a small sense of accomplishment.....even though they have accomplished nothing. Giving a buyer who doesn't qualify a "right of 1st refusal" could cause the seller to end up with nothing if the ready, willing, and able buyer walks away out of frustration. To go one step further...what if the buyer exercises the "right of 1st refusal"? Sure you could add language that says they would forfeit their deposit if they did not close as stipulated but is that worth losing the buyer that could have purchased the home without any of this mess?? Is their deposit enough to mitigate a lost buyer? In a buyer's/weak market where prices are falling, it would never be worth the risk.
The only time it would make any sense to accept a right of 1st refusal is if the buyer did not have anything to sell and could step forward to purchase right away if the seller required them to do so.
So If you don't want to lose control of your sale and be stuck with one of these in your front yardStay away from contingent sales and right of 1st refusals. If your home is not selling you can always reduce the price to attract more buyers. I emphasize YOU because the control of the process remains in your hands.
Bill Gassett is the team leader for the #2 RE/MAX Team in Massachusetts in 2006. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356.
I service the following towns in Metrowest MA: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, and Framingham MA.
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