buyers want sale contingency-bad idea?

i think you've done an excellent job of summarizing all of the reasons why this contingency makes absolutely no sense for you. i would recommend very pleasantly explaining to them that you would be happy to keep them in the loop as you continue to solicit buyers for your place and that they should do the same as they attempt to sell their place.

columbiacounty: Excellent post. It's hard enough to sell one apartment in this market. Making your transaction contingent on the sale of another property makes it that much harder. And what if the other party finds a buyer whose bid is contingent on the sale of THEIR apartment, and that buyer finds a buyer whose bid is contingent on the sale of THEIR apartment, etc., etc....?

I'm still stuck on, sold in 10 days at 3% below ask! Nice. Care to elaborate since it is on "the market".

Also, bseller, what do you know about the property they are selling? Are they pricing it well? Do you think it will sell quickly? Since you've just been through this process yourself - evaluating the market and effectively pricing your own property - you should have a good sense of their chances. If it looks like they will find a taker, then it definitely makes sense to keep them on the hook. These may be the best buyers for you, so keep that in mind. At the very least they appear to be experienced homebuyers who are honest and practical, which bodes well you.

Also, keep in mind that these types of contingencies are not unusual, despite all the risks cited above. It's just that in a market as spooked and wobbly as this one, every risk seems magnified. But if this is their only shortcoming as buyers, consider yourself lucky!

It appears that this deal is a 'no-lose' for your buyers & a potential catastrophe for you. I wonder if you have a good RE attorney to help you on this deal but I would be respectful to these "buyers" but keep looking for a better deal from your perspective. If you've had such interest in this short amount of time, the place must be well priced & should (hopefully) sell soon. Best of luck!

Hubby and I would have done this on an apartment in Gramercy, and the seller didn't like the idea, so we went off and bought something else that was cheaper and wouldn't require us to sell our existing place.

I think it's clear that you are assuming a risk by taking your apartment off the market and waiting for their sale, so the two questions are 1) how big is that risk -- for example, how well-priced is their place -- and 2) how much are you getting paid to assume that risk?

If they are paying you, say, 5% more than any other bidder would, it might be worth it to you.

ali r.
{downtown broker}

i had a math teacher in 9th or 10th grade---crusty old guy who said the only thing that I can still remember from those days. "your first guess is always your best guess, so don't second guess."

you have enough problems selling your own place---don't fall down the pit of trying to psyche out whether the other place is "worth it."

stay respectful (very); keep showing your place and see what happens.

There's not much upside for you, OP, in agreeing to such a contingency. Look, you're obviously doing something right if you've gotten a solid offer after only 10 days on the market. That's huge, especially these days. Why get stuck with someone else's albatross around your neck? Their sale could take months, maybe longer.

Personally, I would never agree to a sell contingency, especially not in this market. There is absolutely nothing to gain by it.

Thanks for all these answers. We had a lot of interest, including people that came back for second looks and brought parents with them. They asked very detailed questions and spent a lot of time here, and said we would hear from them. The problem is that the offer we have was made over a week ago, and Im not sure how long we can hold them off without an answer while waiting for other offers. (that may or may not come)

I have tried to find the place they are selling online, and cannot so its hard to see how its priced.

On the otherhand, if the market crashes even more, they have to buy our place if they sell right? or lose their deposit?

you have every right to ask them to show you the listing for their place if they want a "sell contingency" in the contract. tell them you are considering their offer but this information is imperative in making that decision. it will buy you more time and it is the truth.

Contingency clause is an option. Like all options, there is a price to it. Propose that you are willing to live with it as long as you get paid XXX dollars if the deal does not close. This will incentivize the buyer to sell their apartment, and also cover your downside if the deal does not go through and prices continue to go down.

don't hold them off--tell them the truth of whatever you decided. i personally would not consider the suggestion above; unless they are crazy enough to put the money in escrow, you will never collect it. avoid complications.

http://www.youtube.com/watch?v=aLjIyaOZgQA&feature=related

I would recommend letting the offer stand with the contingency. Don't be so quick to toss out a serious buyer in this market.

The contract should allow you to continue to show your apartment. If you receive another offer with no contingency, the original buyers then should be given 24 or 48 hours to remove their contingency or they lose the deal. Having a standing deal on your place is a positive thing in my opinion - it gives other potential buyers some assurance that the property is priced well. Use it to your advantage to attract the real buyer.

{{Propose that you are willing to live with it as long as you get paid XXX dollars if the deal does not close. This will incentivize the buyer to sell their apartment, and also cover your downside if the deal does not go through and prices continue to go down.}}

Terrible advice and way off the mark. Bseller, please speak to your attorney and take any advice you read on this board with a large grain of salt. An eager buyer is no good if he is unable to buy, and this guy is NOT able to buy, at least not in the near term. I wonder whether he's even put his own apartment on the market yet--sounds doubtful from what you've described.

Please, though, talk to that 'great' lawyer of yours--answering these questions are as much a part of his job in a sale transaction as drawing up your contract.

^^ 'is' not 'are' in last sentence... drrr.

sounds good, but complications arise. can you receive any other price offer? do you need to provide documentation of some sort? what happens if you receive a slighter higher offer but with the same contingency?

and watch out for the reverse pyschology problem: no one makes a competing offer doesn't make the original offerer feel warm and fuzzy.

{{The contract should allow you to continue to show your apartment. If you receive another offer with no contingency, the original buyers then should be given 24 or 48 hours to remove their contingency or they lose the deal.}}

You either allow a contingency or you don't. How do you expect to 'remove' a contingency clause from a signed contract?

Allowance is made in the contract verbiage for removal of the contingency should the seller accept another offer without contingency. It gives the original buyer the first right of refusal and may prompt him to call in a favor from that favorite rich uncle. The seller serves notice that another offer is on the table and the time clause kicks in.

bseller - I am making an assumption here that you have legal representation.

Squid - "terrible advice"???? This isn't rocket surgery, lets hear your counterpoint. What is the downside for the seller?

This is why you use a lawyer.

It's one thing to list your house by yourself, but another to deal with contract questions on your own. Don't worry about bothering your lawyer, that's his job. I can't tell you how many times I've felt like banging my head against the wall after a client has made a major mistake because they thought it was too minor a question to ask about. Many of the folks in this forum are quite knowledgeable about real estate, some also know the law, but no one except your lawyer really knows you and your particular situation.

bad risk in this market -- it took me 7 mo from listing to close when i sold. for you to wait 7 mo for a maybe it is not worth it. no financing to sale contingency.

I agree with most people here that you shouldn't take on the contigency. But triply so if their place is a coop with board approval needed.