I have been involved in two situations during the last three weeks in which buyers with homes to sell submitted lowball contingency offers. Their strategy backfired.
Sellers are not fond of working with buyers who have home sale contingencies, but in this market, they have had to do so. It's possible to structure these deals so that everyone wins. But in order to persuade a seller to consider the contingency, the buyers must make an attractive offer, and they have to demonstrate that they are taking aggressive action to ensure that their home sells within a reasonable period of time.
In one recent case in which I was representing the seller, the buyers submitted an offer that was about $20,000 below the assessed valuation. The offer was sent to my clients without a preapproval letter, and with not one, but two home sale contingencies. One of the homes that the buyers needed to sell was not even on the market at the time of the offer, and we were informed that because of the holidays, it would be at least two weeks before it would even be listed. Needless to say, the sellers were less than enthusiastic about negotiating with these buyers, and the offer quickly fell apart.
Another seller client recently received a similar contingent offer, more than 12% below the asking price, contingent on the sale of an out-of-state property. The buyers asked for three months to put their current home under agreement. This would have put the sellers in the unenviable position of having to wait out the spring market for a sale that may or may not ever happen. Even with a 48-hour right of first refusal, it would not have been a "win-win" situation.
What surprises me, I guess, is that the buyers in each of these situations weren't savvy enough to make the sellers an offer they couldn't refuse. If they had done that, these two properties might be under agreement today.
No comments:
Post a Comment