Real estate:accepting offer contingent upon closing on a purchase?

Question

I found a home and made an offer contingent upon the sale of my home. I got a contract on my home but my attorney suggested a clause to give me an out if the deal on the house I am buying falls through. I accepted her suggestion but I am wondering how common it is for buyers to accept such a clause?

Answer 1

I don't know how common it is, but it sounds like you have a good attorney.  I will be anxious to see what answer Realtors post.

Answer 2

Not to worry, its very common in the industry. The home you are purchasing can be considered your "mortgage" and if the mortgage doesnt go thru/finalize, then you have an entire dead deal or real estate transaction that cannot go through because of no mortgage approval. Just know its very common.

Answer 3

.  There are 2 parts to this.  I never, never buy "contingent".  Your attorney is worried about "protecting" you from from owning 2 houses.  Not me.  If people will sell me their house for my price  they know that i will close their sale.  if my sale on my house falls apart, they don't have to suffer.  I will still close on their house. Even if i have to take an 8% mortgage to do it. Why?  Because i bargain hard and am contingent upon nothing. If i can't get a loan, they keep my earnest money.  I want any seller to know that i am the real thing.  In return, i want the best deal in the world.

Your attorney is protecting you but she is also protecting you from getting a great deal.  No one will bargain with a "contingent" buyer.  The seller has absolutely no certainty that their house is really sold. Your attorney has made that crystal clear.

Answer 4

If the deal on the house you're buying falls through, you are already out, so putting in an additional clause letting you out of the contract doesn't make any sense. Maybe I'm not understanding what kind of clause your agent suggested.

I think your home sale contingency will be more of a problem, especially if there is not time limit. They will probably ask to add something saying you need to sell your house within so many weeks or months, or the contract is void. If they want to sell the house quickly, they may not accept your offer with ANY contingencies.  

Answer 5

Contingencies are basically a one sided contract. It all depends on how bad the buyer wants your house and if they are willing to "Wait in the wings" for their dream house while you make sure you get the one you want.

I do many deals with contingencies but there's always a give and take.

If I were your buyer, I'd make you give me something of value to accept a contingency like that.

Lets compare: (your the buyer) Say your finance  asked you to marry him ,and you said yes. Then his attorney buddy said, "make her sign something saying  that she'll marry you, but you have the right to see if  your other girl friend will marry you first, then if girl#2 doesn't say yes, she HAS to still marry you". That sounds like a pretty good idea huh?

Lesson: It'd definitely take a special girl to accept those terms.

Hope this helps to clarify.

Answer 6

Contingencies can go both ways.  Most common is on the purchase not on the sale of your home but it is understandable if the deal falls through that you don't want to be homeless.   The kind of contingency that is really a hassle is when someone wants to buy a house and hasn't sold their current home yet.  That can drag out forever and lock a seller into a corner.