Dear David,
We recently purchased our dream home. The agreement was conditional on financing and inspection, and gave us 30 days to sell the townhouse we currently own. Our 30 days are almost up, and selling our townhouse has been harder than expected. The sellers of our new home have let us know they might be receiving another offer. I think our deal is about to get bumped and we don’t want to lose our new house. What are our options? – HEARTBROKEN
DEAR HEARTBROKEN: When you’re a buyer with a property to sell, time can solve virtually every problem. The more time you have at your disposal, the more options you have available.
If the seller of your dream home finds another suitable buyer, you will be forced to remove the conditions of your sale or walk away from the deal. Depending on how the “sale of property” condition is written into your agreement, you likely have one, two, or possibly three days to decide if you will abandon your dream house and start your search from scratch, or firm up the sale and hope your townhouse sells before the closing date on your dream house.
It’s time to rely on your circle of experts. Before you get bumped by another buyer (and are officially given notice to remove your conditions), talk to your Realtor about strategy. Perhaps the seller will extend their closing date by 30 or 60 days, which will give you enough time to sell your townhouse if you remove your “sale of property” condition now. This approach carries a degree of risk if your home is overpriced. As a buyer with a home to sell, your level of risk is greatly reduced if your home is priced at market value.
Check in with your mortgage specialist .This is a great time to revisit your financing options, and see if you have a “plan B” that will allow you to own two properties for a short period of time, if necessary. Review the numbers and make a decision based on your risk tolerance. If you can lock in your dream home with a few thousand dollars, it might be worthwhile to do so.
If your agent is fairly new to the business, navigating conditions (or multiple conditions) can be unfamiliar territory. Some agents may be unsure of how to manage conditions if they haven’t had much experience in this area. Conditions were less common in the real estate boom of 2016, and virtually disappeared in the following years as our local market grew increasingly aggressive. Conditional offers have made a comeback in the last year or so, after 10 consecutive interest rate hikes had a cooling effect on the market.
PRO TIP: Every buyer and seller needs to be able to sleep at night. By understanding the available options and strategies early on, you’ll be equipped to make strategic decisions about conditional offers. In your case, it’s important to work quickly. Your options may change if the owners of your dream home receive another offer. #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.
