Most seller’s contingencies are set up so that the buyers are bound to the deal and the seller can cancel if needed. If a buyer accepts contingencies without a specified completion date, he could be left waiting for months for one of those events to happen with the possibility that the sale would never close if the seller could not find “suitable housing” or the seller’s lender did not approve a short sale. If that happened, the buyer would get the deposit money back and would most likely be out the cost of the inspection, appraisal and legal fees for the Purchase and Sale agreement, often in the vicinity of $1,000. In addition to the loss of money, buyers lose time out of the market which could cost them the opportunity to find and buy another property from a seller with the ability to close on the buyer’s schedule. In addition, buyers need to deal with expiring leases and mortgage commitments.
When I have a buyer-client that wants to buy a property with either of the seller’s contingencies above, I recommend that they structure their offers so that the home inspection and purchase and sale agreement are done after the seller has found another home or received third party approval. Many sellers won’t accept those terms.
While sellers are reluctant to allow the buyer to walk away, they should understand that buyers are reluctant to get into a deal that requires them to spend time and money without the guarantee of closing.
Would you get into a deal with either of the two seller’s contingencies discussed?
Have you been involved in a transaction with either of these seller contingencies?
If so, how did you resolve them and what was the outcome.