By Living Room Realty, May 4, 2018
Pulling off a contingent sale* is always a challenge. It is not impossible, but it is really tough to get a contingent offer accepted on a hot property when there are other buyers in the mix. In this situation, my clients (the buyers) had a double contingency and one of the properties wasn’t even on the market yet!
Adrianne & Gino (+ 2 kids) were selling their house in SE Portland and searching for a home in West Linn to share with their parents. We had been searching semi-casually in the weeks leading up to the listing of the SE property with the thought that if the perfect property came along, they’d jump on it. Then in late March it happened, the perfect house: perfect layout, perfect yard and a Mt. Hood view to boot. The offer was contingent on the sale of the SE house (that was listing in a few days) AND the successful closing of a home equity loan on the Grandparents house. It was a lot to ask of the seller to begin with… then the other offer came in.
My clients upped the ante by a good bit on the sale price. That wasn’t enough; they had to release the earnest money** and make it non-refundable after the home inspection. Everyone grit their teeth a little and signed the contract. It was a lot of risk for all parties involved, but everyone was on board with the plan.
Long story sort…all of the contingences were cleared in good time and we tripped & stumbled our way towards closing. At the end of the day, the sellers got a great price and the buying family got a house that was perfect for their unique needs. Were there some sleepless nights? Yes! Was it worth it? Absolutely! But in the moment, it all seemed a little insane.
*in broad terms, a ‘contingent sale’ means that the buyer need the proceeds from the sale of their current home for the down payment of their new home. It adds many layers of complexity and risk to all sides of a transaction.
**the earnest money is the buyer deposit and in most cases it is refundable in the event of a sale fail. By releasing it, the buyers are letting go of all the contingencies that protect those funds in the transaction. For example, if one of the buyers lost their job a week before closing then that money would go to the sellers. Under normal circumstances it would have gone back to the buyer under the financing contingency.
