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Tips on What to Do when the Buyer Has a House to Sell First:
It is very common that a buyer may be forced to make the puchase of one house contingent on the sale of their existing house. Buyer's must understand that although this is not unusual, your offer will not be as strong as that of a buyer who can make a non-contingent bid. Buyer's Strategy: 1/ Make sure to have both the sale and settlement of your first house before buying the second. Remember that having an offer to buy your existing property does not guarantee that it will go to settlement. Your buyer's financing or other issues could arise. 2/ If your deal with a seller is terminated, be sure that your agreement stated that your deposit will be fully refunded. 3/ Be certain that in the transition between houses you have a place to stay. Consider contract provisions allowing a post-settlement occupancy agreement to reside in your old house after closing or a pre-settlement occupancy agreeement to live in your new house before closing. Seller's Strategy: 1/ Beware of simple offers that do nothing more that tie the sale of your property to the sale of the buyer's house. 2/ Require an "out" clause so that if you get another offer the purchaser will have a short period of time (and be specific but reasonable) to either back out of the deal or commit to the transaction. 3/ Require an absolute cut- off date after which if you elect not to sell the property, you have an option to terminate the deal. 4/ Do not require the buyer to use your broker to market his property. Tips on What to Do When the Seller Needs a New House: Buyer's Strategy: 1/ Do not enter a deal where the seller has an unlimited amount of time to purchase a second house. 2/ Understand that a seller's desire to find a second house is not unreasonable and act accordingly. 3/ Make sure that your agreement allows you the ability to cause the deal either to terminate or to be accepted within a specific an reasonable time period. 4/ In the event that the deal falls through, provide that your deposit will be returned in full at a specific time frame. Seller's Strategy: 1/ Try to arrange settlement on your old and new houses at the same time and place. This is convenient and ensures you have a place to stay. 2/ Be sure you have tied the sale of your first house to both the purchase and settlement of your second. It is not enough to have a contract on a second property- remember deals can fall through. 3/ If the buyer wishes to withdraw, get as much time as possible to accept the offer- 72 hours rather than 24. 4/ Consider including a pre-settlement occupancy agreement in the contract so that you can reside in the new house before closing or a post- settlement occupancy agreement so that you can live in the old house after closing. Remember as your Realtors we will work with you to negotiate for your best interest. Contact us for your free consultation! |
