Let’s say you are ready to move and you found a house (and garage) you really like. You are ready to move in now. You are interested in purchasing it however you learn there is already an offer on said house but it’s contingent on the sale of that persons current house. Is there anything that prevents the seller from accepting your offer in place of that original contingent offer? Any other related in/outs to be concerned about in such a scenario?
That seller has a contract in place with the buyer. If you look through THAT contract, it has certain "outs"for buyer and seller. If exercised, they can cancel that offer, and take your offer.
You say it's an offer, but is it in contract? An offer and "in contract" are two different things. You should make an offer if you're that seriously interested in the property. Maybe the seller has an out, if they're in contract. And if they're not actually in contract but instead sitting on an offer - then you're probably in!
I lived and prospered from the same exact scenario...
It was July 2011 we had put the condo up for sale 2 years earlier. We moved 50 miles and were renting a house in the new town while waiting for the condo to sell. It took 2 years but the condo sold. We were now renting month to month so we were very flexible since we now owned nothing. Having sold the condo, we had money, we were fully pre-approved...all we had to do was buy. In the realty world, we were "real buyers" not shoppers. We had been casually working with the same buyer's agent for a long time but now with the condo sold we were fully engaged.
We are generally not liking what we are seeing in our price range. It was a respectable price range but inventory was crap during the house crisis days. What was out there was either foreclosure or priced so high because the owed so much. The agent then come to us one day with what was generally "unscrupulous" activity that worked in our favor. Seems that another agent in his office had just taken in a super low offer on a property and the offer was being entertained.
The house had recently come down in asking price by 15%. This offer was 43% off the original price.
We had found out the price of guy #1's offer. We also knew it was contingent upon #1 selling his house (what had not yet gone up on the market.) We submitted a formal back up offer for the same price but that we could close in 20 days from acceptance.
Guy #1 scrambled. Though we never spoke with #1 we heard he was making promises like, "I'll own 2 houses at the same time." However, in those days, it didn't really matter who you were, you weren't getting 2 mortgages. So, 30 days later, guy #1 still couldn't secure financing and the house went to us, the back-up offer.
Just so happened that guy #1 was the then reigning President of the County Club. The Club which we now live 40 ft off the 18th fairway. Needless to say, we never got the "welcome postcard" from The Club like you might expect in this situation. We are not in an association and not bound to "having to" be part of the club in any way.
When I first met mey new neighbor, the one with the 5,000 sqft house, he said, "I knew someone else looking at that house." My only answer was, "I don't know, I'm not from here." That was my attempt at being both kind as well as showing, "I'm not part of your small town politics and though he may be important to you, he is an unknown to me."
Heck, I'd rather just give guy #1 a big thank you. If not for him, I would have never even looked at this house which was way out of my price range (at asking price.)
So, if you like the house, put in a purchase offer. That will be the back up-offer. Let the seller decide which offer they like better.
Thanks for the replies! John that’s a heck of a story.
Not sure if it the contingent offer is “in contract” yet but should know soon. I’m going about this without a realtor representing me.
Get a Realtor to represent you. They are basically free as a buyer.
Don't worry about the whole in-contract or not thing. If you like the house, formally submit an offer.
The offer will get to the hands of the seller. The seller knows if he left "some room" in his deal #1 to wiggle out of the deal. If your #2 offer is better to the seller he will likely then "wiggle out" of that #1 offer and you will be buying the house.
How a Realtor is Free as a buyer...
(These things vary by market on specific percentages but the moral of the story remains the same)
When selling a house, Realtor Fees are 8%. For someone selling a $200k house that means $16k will be paid to the Realtor(s).
The listing Realtor will make 1/2 or $8k and the buyer's Realtor will make 1/2 or $8k. If you have no Realtor then the listing Realtor (the one who's name is on the front yard sign) will make all $16k.
Not having a Realtor doesn't save anyone any money it just means one person gets all the money. Get yourself represented by a Realtor and have someone working for you that you do not have to pay.
In reply to John Welsh :
Thought realtor fees were generally 6%. Although with the hot market right now, many realtors are accepting less...
In car terms, here is what I think is happening.
#1 has written paper and maybe even given a "deposit" toward purchase that says, "I like your car and I will buy your car for $2,000 as soon as my Income Tax Check arrives." This is an offer to buy written on paper.
Meanwhile, you come along and you are interested in the same car. You are willing to pay the same $2,000 or maybe even slightly less but....you have the cash with you and can finish today.
Expect that the seller plans to give back #1 his small "deposit" on his "some time in the future" purchase and instead go with your "can finish today" purchase.
docwyte said:In reply to John Welsh :
Thought realtor fees were generally 6%. Although with the hot market right now, many realtors are accepting less...
(These things vary by market on specific percentages but the moral of the story remains the same)
Last two investment property purchases I did without a realtor, I had the selling realtor, credit her half (the part that would go to MY realtor), back to me.
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