Real Estate Q&A
We recently, about a month ago, turned down an offer on our home that was contingent upon them selling their current home. They asked us to take our home off the market for two months while we waited for their home to sell. They had already had their home on the market and we decided we did not want to risk having our home off-the-market while we waited for their home to sell.
We asked our realtor last week if they had sold their home yet and found out they did have it under contract, but have decided to purchase a different home.
We are very frustrated and feel like they should have come back and put a contract on our home, as they said they would surely bring us another offer when their home was sold. We just feel like we have been left at the altar and now are starting over. What should we have done differently?
— Jake and Laura, Grand Junction
Jake and Laura,
You’re darned if you do and darned if you don’t, that is the lesson learned from contingent offers. When we receive a contingent offer, it boils down to a calculated risk. You have to work with your agent and determine, to the best of your ability, how probable it is that their home will sell? This is also dependent on how good the offer is? If it is a good offer, then sellers are generally willing to take on a little more risk. As it is with every contingent offer, you must decide if the probability of their home selling outweighs the risk of taking their offer and waiting to see if their home sells. Remember, you always have options.
Your first option, the option you chose, is to not accept their offer with a contingency and count on them coming back when/if their home goes under contract. My experience is that few people come back after they have been spurned. Remember, buying a home is an emotional process and you want to capture that buyer while they are emotionally invested in your property. When you turned down their offer, they may have felt like they had been spurned and started to look around again at competing homes, in essence, looking for a new partner. Bad analogy, I know, but you get my point.
I have found it a better option to find some common ground to work on, which indicates that you want to sell the home to them, but you also need them to recognize your need to continue trying to sell your home if someone else comes along and wants to buy it.
This leads us to other options, the 48 hour and 72 hour first right of refusal. This means that you continue your efforts to sell and if you get another offer, they have 48 or 72 hours, you determine the length of time here, to remove the contingency on the sale of their home. If they can not remove the contingency, then you can sell it to your new prospective buyer. Most buyers appreciate the fact that you, like them, are looking to sell your home and understand your need to take the first ready, willing and able buyer who will meet your terms for sale. You have now shown them that you want to sell your home to them and they are likely to receive this response in a positive fashion. They are now still emotionally connected to your home and feel like the next showing on their home may deliver a contract and get them into your home. They are still invested and still working toward the goal of getting their home sold, so they can purchase yours. Again, it has to make sense and it is a calculated risk.
The key to everything is the ability to continue marketing the property and solicit other offers. There are several creative ways to create a win-win for the buyer and seller and have everyone involved, agents included, working toward a common goal.
Remember, you turned down their offer, there is nothing that says they can not change their mind. You ran that risk when you turned them down and played hard ball. I do, at times, recommend taking a contingent offer, but often leave the seller with the contractual ability to continue to sell their home should they receive another offer, and in my mind this is key. Sometimes you have to be willing to take on a little risk, as long as it does not leave you out of the game. I hope this helps, and I am hopeful another offer is right around the corner.
The Kimbrough Team
REMAX 4000 Inc.