Dear David,
Our house had been on the market for a couple of months when we finally received a full price offer. It was conditional on the buyers being able to sell their home. We gave them six weeks to get it sold, but their time is now up, and they’re asking for an extra 30 days. We’re not sure what to do. Our agent thinks their house is overpriced, but we haven’t had any showings on our place in awhile, so we’re reluctant to kick this offer to the curb. – FEELING STUCK
DEAR FEELING: In the last year or two, the real estate landscape has changed dramatically. At the peak of the market in the early 2020’s, COVID-era buyers were scrambling to snag what they could, and it was rare for sellers to receive a conditional offer. Now the pendulum has swung the other way. There are plenty of properties to choose from (at least for the moment) and conditional offers are commonplace once again.
The “Sale of a Buyer’s Property” condition (known as an SBP) can be frustrating for sellers as it leaves the sale of their property in limbo. In your case, you have a full price offer, but there are strings attached. Your buyer needs to sell their own house, and depending on how well they understand the market, they may struggle to embrace techniques that tend to move a house quickly. Overpricing could be evidence of this. Regardless of the economy, interest rates, or how the moons align, price is the greatest determining factor when it comes to selling a property. Sellers need to understand this, and set their price according to the market.
Your buyer didn’t get the results they wanted in six weeks on the market, and conditions have likely changed since they listed their home. At this point, your challenge is to overcome the belief that the offer you have with an SBP is your only option. Truth be told, this “bird in the hand” is probably preventing you from landing something else. Any agreement with an SBP will likely include an escape clause that allows the seller to entertain other offers. If an acceptable backup offer is received, the initial buyer will typically have 24, 48 or 72 hours to firm up their sale or walk away from the deal. A property with an SBP condition remains on the market, but agents may be reluctant to show it to their clients, since another buyer has already secured the first right of refusal. This may explain why your showing traffic has dropped off.
If you decide to extend the SBP condition for a few more weeks, shorten the escape clause to 24 hours. A backup buyer may be more willing to come forward if they’re not waiting days to be able to buy your house. Have your agent talk to the buyer’s agent about their listing price. If your buyers are motivated, they need to price their home at market value.
PRO TIP: If your buyers are unwilling to change their selling strategy, let them go with an invitation to return when their house is sold. At the same time, ensure your own listing price is still in line with today’s market as a lot can change in a couple of months. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.
