First of all, let’s talk about what a Contingent Offer is. All offers have contingencies built into them like an appraisal, inspections, and financing contingencies. Those are not what our industry calls a Contingent Offer. A Contingent Offer is an offer from a buyer who needs to sell their home in order to buy a new home.
Most sellers are hesitant when considering contingent offers and that’s for good reason. What if the house doesn’t sell? What if their buyer backs out of their house? What if they don’t close on time? Those are all valid concerns.
Here’s what I’ve learned over the years. The contingent buyer is what I call the sandwich buyer. They are in between two homes. One the one hand they have a buyer buying their home that they are trying to successfully sell. On the other hand, they are buying a new home and don’t want to give that seller any reason or right to cancel on them. The sandwich buyer’s main concern is to NOT BE HOMELESS. Simply put, they don’t want to do anything that will cause either of the two transactions to fall apart.
With that in mind, I have found sandwich buyers to be some of the best buyers to work with. They usually offer higher prices on our company listings and are ask for fewer repairs. They themselves are selling a home so they can relate to the seller’s feelings and thoughts better too. They are often willing to pay over appraisal price, if needed, to simply keep the deal alive.
Will they back out? Yes, it’s a possibility. I’ve had more cash buyers, however, cancel escrow than contingent buyers. All buyers can cancel regardless of the situation.
Should a seller accept an offer from a buyer that has not yet put their home on the market? That depends on many factors and too much to go into here.
The next time you have a seller that doesn’t want to work with contingent offers, walk them through these benefits and ask them to reconsider because they may be turning away the best buyer for their home.