Real Estate Contingencies

Common questions I hear almost daily are those that come from people relocating to Denver from other parts of the country. Many housing markets are soft, the days on market numbers are increasing due to the lack of buyers.

Our job market in Denver is strong and getting stronger. Each day we have people trying to sell in another market and move here. The hitch for so many home buyers is the inability to sell their homes.

Most people don’t want to be stuck with two mortgages. Heck most people can barely afford one mortgage much less two! Having a home in one city and a job in another causes enough stress.

There are solutions.

• Get tough on price with the old home. Reduce the price to make it more attractive than anything else on the market.
• Get a bridge loan
• Find a home where the owner will do a “rent back” until closing. Some homeowners will do this if you sweeten the pot by putting down “non-refundable” earnest money. That means if your home never closes, you lose your earnest money. If it does, you get to put the earnest money toward the closing costs on your new home.
• Rent your home in your old neighborhood until the market improves. Things will get better over time.
• Consider buying less of a home on this end and moving again in a couple years when the other home has sold. This way you can be settled and focus on the job.

Most home owners in the Denver metro market are not willing to accept an offer that is contingent upon another property selling, unless it is already under-contract. Going into a deal that has no end in sight is not a good way to do business.

But…

Most homeowners are willing to work with a contingency if the buyer’s home has a buyer. So when your home sells and is what we call “under-contract” waiting to close, you can go find a home and write an offer. Be sure you specify
in the contract the closing is “contingent upon the successful closing of your home that is currently under-contract.” This clause will protect you if by some sad chance your home fails to close.

Contingent offers are a way of life. They aren’t a sure thing for either side, but with the proper actions they do become a sure thing and just another path to get to closing. under-contract.

About the Author

Kristal Kraft
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog