Buying a home on contingency: Episode #331

Buying a home on contingency

Todd: Hello. Welcome to Todd Miller TV. Joined here today with Oana. We are talking about writing an offer on another property contingent on your house closing.

Oana: OK.

Todd: OK. Is that a great idea right now in the market?

Oana: OK. In some markets that works. In our current market situation, that does not work.

Todd: OK. Really quick, in what kind of market situation does that work?

Oana: That works in a market where homes are not selling anyway and you’re coming from a market where homes are selling.

Todd: So if there are very little sales and it’s a very slow market, and people aren’t getting offers on their house …

Oana: Right.

Todd: They will accept an offer where they will wait for you to close in your house and buy yours.

Oana: Right.

Todd: OK.

Oana: So a lot of times, a seller will consider your offer if you’ve already got an accepted offer on your house and you know you’re going to be closing on your house in 30 days. So they will accept your offer because they’re thinking, “Well, it will be maybe 45 days before you can close on my house so that’s OK.”

Todd: OK.

Oana: But in the Las Vegas market, that’s not going to work right now. The reason that won’t work is because we have far more buyers than we have inventory. Sellers really don’t need to wait for you to sell your home, close on your home in order to be able to purchase their home. We sill have probably half of our market right now being cashed. We still have multiple offers on a lot of properties.

When you look out there, there’s very little available inventory. That means homes that do not currently have an accepted offer. So under those circumstances, sellers do not have to entertain a contingent offer. That means where they have to wait for you to sell your home.

Todd: One of my Facebook buddies posted that he took a listing over the weekend and today he has 51 offers on the property.

Oana: Right.

Todd: I’m guessing they won’t accept the one where they need a home sale contingency.

Oana: No, they won’t.

Todd: OK.

Oana: No, they won’t. When you’re talking about multiple offers, I mean the idea is that your offer is the most attractive to that seller which means that you can close the fastest and for the highest dollar amount.

Todd: So how do they do that? Because what they want to do is they want to close on their house and then close on the other one and try to like move house to house. What’s your suggestion if they want to sell one house and buy another house?

Oana: OK. So if they want to sell one house and buy another house, they’re going to have to maybe do a rent back on the house that they’re selling.

Todd: OK. So sell the house. Say I will sell it to you if you let me stay in for two months.

Oana: Right.

Todd: And I will pay you rent.

Oana: Right.

Todd: For two months and then at the end of two months, they have to move out. That gives you two months. You could secure the house, get the offer accepted, get a loan approved or whatever and close on it. Then you could just move into it.

Oana: Right. So that’s generally what most people will end up doing. But of course that depends on that purchaser’s financing because their financing may not allow for the seller to do a rent back. So that does get a little bit more complicated but that’s something that your real estate agent will be able to help you with.

Todd: Good. Awesome. So, anyway buying a home on contingency, not seeing a lot of them right now. None of them are being accepted. I haven’t seen an accepted one in a long time. So thank you very much Oana.

Oana: You’re welcome.

Todd: That is my update for today buying a home on contingency and hope to see you on another video. Thanks.