Are Contingent Offers Starting to Be a Workable Strategy?
By Keith Kyle
In the past two months I’ve had three contingent offers accepted. Not only were the offers accepted but my clients homes were not even on the market yet. I spent much of 2017 submitting contingent offers for these clients only to be rejected time and time again. Often times we were competing against 15-20 other offers and some were all cash….we didn’t have a chance.
So is that changing?
It may just be timing, luck or the right situation, but sellers seem to be considering contingent offers in the current Redondo Beach real estate market. It’s key to submit a VERY strong offer in regards to price and terms, but sellers may be realizing that the buyer’s homes will likely sell fairly quickly.
For those that don’t know what a contingent offer is…..there are many situations in which a home buyer needs to sell their home to have enough money for the down payment and to qualify for the loan. When you submit an offer that requires the buyer to sell their home to make it work…that’s a contingent offer. It adds a whole additional level of uncertainty to the sellers of the home being purchased. No longer is their just a home inspection, appraisal and loan on their house……but likely a home inspection, appraisal, and loan on the buyers sale as well. The uncertainty is the reason most sellers won’t consider it unless it’s the only option.
In a sellers market with multiple offers and high demand, getting a contingent offer accepted is a long shot at best, but maybe the recent wave of acceptances is a sign that things are changing slightly.