Can you make an offer on a home in contingent status? Episode #328

Hello. Welcome to Todd Miller TV. There was a response to one of the videos. There was a question that asked, “Hey, is it a good strategy to get a house by going after ones in contingent status?” What contingent status means is there’s an accepted offer but something has to happen before. It’s a pending offer meaning there has to be some inspection done or some short sale approved or some loan approval or something like that.

So we’re going to answer the question. OK. A housing contingent status, the problem with that strategy is that most of those houses actually end up moving forward to a sale. So you’re going to be chasing houses, sending in offers and they’re going to go, “Well, OK, but I have got an offer. I’ve got to wait for them to finish their whatever.”

Here’s the other problem. Let’s say the offer does fall apart. That person is not just going to take your offer. What they’re going to do is they will hold on to it and OK, well give me a couple of days to think about it. They’re going to tell their agent. Hey, put it back in the MLS and make it active. Let’s get 10 more offers in here and then let’s go again.

So that defeats the purpose. The idea I think is to be the only offer and when it falls apart, you kind of step in and take over and that’s not strategy that works at a rising market because when I work with a seller, what we do is if the deal falls apart, we put it back in the MLS and get a bunch of offers.

We don’t just want to take the one we got because how do we know we can’t get more trying to get – I’m trying to get as much money for my seller as possible. Not only that. I don’t really know that your offer is the best. I mean it might be cash but it might be financing and I might get a cash offer or some terms or something that are better.

So it’s just better to wait for more offers. So the answer to the question is, I don’t think that’s a good strategy. A good strategy is to find a house that’s available that doesn’t have a lot of offers and then negotiate the right price. Don’t just look at the list price and do that. Make a deal with the seller that makes sense for everybody and move forward that way. That’s the best way to do it.

But the seller is going to get the most money and the best deal by putting it out to everybody, not just taking the one offer that happens to come in while the house is in contingent status with another buyer.

So anyway, that’s my update for today and hope to see you on another video. Thanks.