The Chain of Home Buyers and Home Sellers

 

There is one scenario that many don’t consider when entering the world of buy and selling a home and it looks something like this: You finally decide to sell your home. The market is hot and two of your neighbors home sold in a bidding war that got the owners MORE than their asking price. You call up the local real estate agency, go through the required agreements, get the pictures taken, have the open house, and…..nothing. A few tire kickers showed some interest, one was a potential buyer. But that’s where it ended. A couple of months go by and you start to consider not renewing your contract to list. Then, the phone rings. It’s your agent calling to let you know that another agent has contacted them and there is a buyer who is serious about the purchase…but there is a catch. Before the buyer can make the purchase, they have to sell the home they are currently in first. They can’t imagine purchasing another home and yours is the one they have always dreamed of. It checks all of their boxes! What are you going to do? What are your options in a situation like this?

There are several courses of action you, as a home seller, can take. However, to protect your interest, it would be advisable to gently advise the buyer that you cannot put your property on hold until he has sold his house. Reassure him, however, that in case your home is still on the market by the time his unit has been sold, nothing would prevent you from transacting business with him.

Most buyers would be willing to present you with contingent offers but it may work to your disadvantage. Once you accept a contingent offer, you will have to advise your agent (or the real estate agents of other buyers) about this. Buyers or agents who are aware that someone else has laid claim to the property may have second thoughts about even considering your home. You may not get back up offers from other potential buyers as they will think that your home has already been reserved.

In addition, buyers who can afford to purchase a home outright would not want to wait until the 1st buyer reneges on the contingent offer. They would rather spend the time wasted waiting for the reply, looking for other available homes.

If, however, you decide to accept the contingent offer, do not remove your house off the market. Remember that you are unsure of the buyers capability to make good on his promise. After all, his buyer could be in a similar situation and it becomes a never ending chain! You just have to inform your potential buyers of your outstanding agreement. If the buyer you are talking to is serious about purchasing your home, this pending contract will not deter him from making an offer.