Navigating Property Contingencies and Home Selling Deadlines

Are you in the process of buying a property contingent on the sale of your current home within 90 days? You’ve prioritized your purchases and have now found your dream home, but there’s a catch: your house listed for sale hasn’t received a solid offer after five weeks. Is there anything you can do about it?

Penalties, Extension Requests, and Defaulting

When entering into a home purchase agreement with a sale contingency, it’s crucial to understand the terms and conditions. If your home isn’t sold within the specified timeframe, you could face penalties such as losing your deposit. However, you still have options. For instance, you can ask for an extension, but again, it depends on the agreement. Some contracts are quite stringent, and you might lose your deposit if your home isn’t sold within the timeframe.

Strategic Options

Here are several strategies to consider:

1. Reduce Your Asking Price

Start by seriously considering a lower price for your home on the market. Higher prices might scare away buyers, making it harder for you to sell within a tight timeframe.

2. Negotiate for an Extension

Engage your real estate agent to negotiate an extension with the seller. Be prepared to pay a premium for this extension, as it increases the seller's risk. Alternatively, prepare for the possibility of needing to default on the sale of your home and pull it off the market.

3. Consider an Option to Buy

Another strategic option is to enter into a one-year option to buy or longer. This gives you the flexibility to buy the property at a later date, allowing more time to find a buyer for your current home.

Marketing Your Home and Finding a Buyer

A lot of answers focus on strategies for marketing your home. Here are some points to consider:

Marketing your home effectively is crucial. Always recommend to sellers that they should sell their home first before exploring sale contingencies. Very few sellers agree to take their home off the market when there’s no contract on their buyer's home. Better outcomes occur when the buyer offers at market value or higher without financing. It's also wise to get your home on the market with a solid contract and reasonable contingencies. This increases the seller's confidence in your offer.

Enhancing Your Home's Appeal

To make your home more appealing to buyers, consider:

Price Adjustments: Work with your real estate agent to lower the asking price if necessary. Many sellers list their homes at overpriced values. Visual Appeal: Hire an interior designer to help you make your home more attractive. This might include a fresh coat of paint, decluttering, and improving the landscaping. Address any foul odors, especially from the kitchen, by engaging external catering services for fresh, fragrant meals. Lights and Atmosphere: Ensure your home is well lit and smells cozy. Fresh flowers and soft background music can make a significant difference. Showings: Consider not being present during showings to maintain a professional and neutral atmosphere.

Alternative Financial Strategies

During the final extension period, explore:

Contingent Refinancing: Work with a bank to conditionally refinance your current home, pulling out enough money to make a substantial down payment (about 30%) on the new home. Simultaneously, get pre-approved for a mortgage to cover the remaining cost. Rental Income: Consider renting out your current home to generate rental income. This can offset expenses and provide tax benefits. Agent Expertise: Ensure your real estate agent has expertise in creative financing and can coordinate the entire deal to ensure a successful transaction.

In conclusion, navigating the complexities of a home purchase with a sale contingency can be challenging, but with strategic planning and flexibility, you can find a way to move forward. Negotiation and marketing are key components to successfully closing the deal on both ends.