3 Keys to Writing a Successful Contingent Offer
A number of clients have recently asked me about writing a contingent offer, along with the details that surround an offer of this nature. So I wanted to share my thoughts on writing a successful contingent offer; given the outlook of the current market conditions here in Portland.
For those of you who don’t know, a contingent offer is when you offer to purchase a property, with that purchase being contingent upon the successful sale of a home you currently own. This typically comes into play when you need the funds from the sale of your current home, in order to qualify for the purchase of your next home.
First, it is very important to have your current home market-ready. For sellers to consider a contingent offer, they’ll want to know that your home can be on the market within three to five business days of accepting your offer. And this is where I think a lot of people make a mistake. With low inventory still a factor here in Portland, the natural reaction is to sit back and wait until the right property comes along to buy, before preparing your home to sell.
However, if you want your contingent offer to be considered, your home really needs to be market-ready. This means all of the home preparation work, minor repairs, staging and updates that we do, all need to be completed prior to writing an offer on another home.
This preparation process takes time, and it’s a tall order to ask a seller to wait several weeks for you to sell your home, just so they can sell theirs.
The home preparation process is something I have talked about in a previous video, so please feel free to watch that here for more insight on this process.
Home preparation is even more important when writing a contingent offer, because you need to provide an extra level of confidence in the saleability of your home to the Seller and Listing Agent of the home you are trying to buy. They want to know that your home is going to sell, and hopefully sell quickly. After all, the sale of their home depends on it.
Secondly, it is critical that you price your home appropriately when writing a contingent offer. Now’s not the time to test the market with a higher price – because you simply don’t have the luxury of time. Buyers with contingent offers are typically given a deadline to sell their home by, before the home they want goes back on the market. So developing a pricing strategy to sell your home quickly is crucial.
Lastly, make the terms of your offer attractive to the seller. You may end up paying a premium for the home that you want to buy, just for the seller to consider your contingent offer. The fact of the matter is, a contingent offer is weaker than a standard offer, because a lot of dominoes have to fall in place for the transaction to close.
Simply offering a contingent offer typically means sacrificing a certain amount of leverage, but if it helps you buy the home you want, it’s worth it in the end.
If you’re looking to buy a new home, but you need to sell your current home first, don’t hesitate to give me a call. I’ve helped many buyers through this exact same process, and I would be thrilled to do the same for you.
If you have any other questions about the market, or real estate in general, feel free to reach out to me as well. I’d love to help.