CONTINGENCY SALE – PROS AND CONS
Sellers may be reluctant to accept an offer that is contingent on the sale of another property. However, such a sale can be structured to minimize the risks.
The sellers should reserve the right to require the buyers to meet any contingencies within a short period of time, (24-72 hours), if they get a second offer. This is sometimes referred to as a contingent sale with release clause.
Other prospective buyers are more likely to make a backup offer under these circumstances because the seller can turn up the heat on the current buyer if the new offer is better than the current offer on the table. The seller can also require a relatively high earnest money deposit and offset some risk in this manner.
Contingent sales can work well for the sellers if they address the potential risks and hold the buyers to their contractual obligations. Each situation is different, however, so go over the terms with your Realtor before accepting a contingent offer.
Dave Wallace is the President of Alliance Realty, Inc. in Ventura. He can be reached at (805) 644-1111 or email davewallace@start-packing.com. http://alliancerealtypros.com/homesearch.htm