Today’s market has continued to see steady growth, low interest rates, and high consumer demand. The past 6 weeks have seen 192 homes sold. Currently, there are 1,248 active homes for sale, along with 192 under contract. The pending homes are slightly down from last month, as the holiday season historically slows down the market.
If you are considering selling, this is the best time to get top dollar for your home and sell it in fewer days on the market while the inventory is lower.
Contingent Contracts – In this scenario, you have to sell your home prior to buying your next one. You decided your old home is not enough anymore, and you are listing your house for sale while already having found your perfect future home. Did you consider the implications of trying to buy a home before your home sold? Roughly 85% of Americans cannot afford to purchase their next home until their current home sells. You now need to consider a contingent sale. If you absolutely cannot wait to write a contract on the future home until your old home sells, we need to write your contract, contingent upon your current home selling. Doesn’t sound so bad, right? Most sellers and their brokers cringe when they hear the word "contingent." Things to consider: the NC Real Estate Commission recently removed the old contingent sale addendum that gave the buyers protection. Now, the NC Purchase Contract has an area for buyer disclosure to identify that you are selling your home and need to close on your home prior to purchasing the sellers’ home. There is a lot of risk involved for a seller and a buyer in this situation. It allows you until your due diligence date to sell your home. If it hasn’t sold yet and due diligence is up, you must decide if you are okay with taking the chance of losing your earnest money deposit and take confidence in your real estate broker and your home’s marketability to sell quickly.
If you are not okay with risk, let’s rethink this from the first stage of writing an offer. Have your attorney write an addendum, giving you protection to sell your home prior to purchasing the new home. Many aspects of legal language are involved and need to also give the seller some protection for a timeline; they will allow you to take their home off of the market so as not to have a unilateral contract and give them more reason to accept your offer.
The implications of having a contingent sale will place a difficulty upon all parties while negotiating the contract. Sellers and experienced brokers are not fans of contingent contracts, and buyers will lose negotiating power for better terms, meaning the seller may command a premium for the home and will hold most of the playing cards during the inspection process as well.
A seller that is willing to take their home off the MLS while waiting on yours to sell before purchasing their home will be at a marketing disadvantage for many reasons. If your home sale falls apart and it has been off-market for, let’s say, 90 days or more with you, and it comes back to the MLS as active… it will not have the firepower it did as a brand new listing. Buyers will ask what was wrong with the home for it to be terminated? Why has it been on the market so long? Ultimately, they may pass right by it with preconceived notions that something is wrong with the property and move on to the next. Handling these sales takes experience.
We have represented many successful contingent sales throughout our careers for both buyers and sellers. They are never without speed bumps, but our experience in the industry has given us the road map to get you from contract to closing.
Be sure to stay tuned for our next post, which will have a full recap on the final 2019 statistical breakdown.
See you then.
