Most homeowners don’t have the financial capacity to buy a new place before they sell their present home. Buyers who have not yet sold their current homes often make offers on homes subject to or conditional upon their present home selling. The trouble with that is that Sellers don’t want to take their property off the market and wait until the buyers’ home sells. Doing that would make them much too dependent on a sale they have little or no control over. So, the answer to the question is to add a time clause to their purchase contract. The time clause states that in the event the Seller receives another acceptable offer the Buyer or the Buyers’ agent will receive written notice that they must remove all their “subject to” clauses from the purchase contract, or forfeit the deal.
The benefit to the Seller is that they have greatly increased the likelihood their home will sell. Now, either receiving yet another offer on their own home or the Buyers’ home selling will result in a sale. Being under contract with that “subject-to-the-sale-of” buyer also keeps that Buyer from continuing to look around and perhaps choosing a different home.
The negative to the Seller, is that it nearly always diminishes the number of showings they get. The shorter the time clause the less true this becomes. I recommend 24 hours not excluding Sundays or statutory holidays as that impacts the number of showings the least. The MLS system leaves the listing in the fully active group of listings for the same reason.
The benefit to the Buyer is that they can put their existing home on the market, comfortable that they know where they will be moving to. Many people are afraid, and often rightfully so, that their home will sell and there may not be a suitable home to buy on the market at the time they need it to be. Making offers subject to the sale of their home offers the required protection. People in such a situation, can make the listing of their home conditional upon having a binding contract on the house they wish to buy. This adds protection to.
Sound complicated? It really isn’t. Your realtor can be extremely helpful here by setting up both listing and selling contracts with the right conditions to protect Buyers and Sellers.
Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email her or call 503-3755.
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