Ask yourself this, if you were selling your home and someone offered you 10k more with a contingency, would you accept it before a cash offer that's 10k lower?

No I wouldn't. In fact we had a buyer who offered more than that and we told him to come back when he sold his place. As a seller, I'd rather take the sure thing and we did. But then again, thankfully I'm not in a position where every single dollar is needed for my new place.

Have you considered adding onto the house you are in right now and making it larger?

"As a seller, I'd rather take the sure thing and we did. But then again, thankfully I'm not in a position where every single dollar is needed for my new place."

Let me get this straight. You have enough money to where you don't have to worry, yet you take the lower (more than 10k) offer because it's safer? Am I missing something here?

I would think if you're well off then you could take on the risk of the higher bid in hopes of receiving more than 10+ thousand...

Was your market tough or something or is 10k not much money to you?

I'm poor btw so forgive me if my comments/questions come off as rude..

Have you considered adding onto the house you are in right now and making it larger?

Yes, we have considered this, and may still consider it. The problem is we don't have a large lot, and adding on would take away a portion of the already smallish yard. We aren't sure if we'd want to do that with small kids. We need to do a lot more research if we decide to consider that option seriously, but I think the cost to add on the amount of space we would want (probably a first level family room and a master suite upstairs? I really don't know) would be quite pricey and it may make sense to just buy a bigger house.

We went through your emotions on this when we last moved. We first tried to find a new construction house so that we could time the sale/move but we live in a large urban area and frankly there isn't new construction available within a 30 minute commute of my workplace except in very high end developments which we didn't want to live in or couldn't afford. Once we realized we'd have to buy an existing house we came to the conclusion that we'd have to be prepared to move into temporary housing. That would have been inconvenient since we have a dog but we didn't see any other way. One thing that helped was that we did have some flexibility in the new neighborhood. As it turns out we took the plunge, listed our old house, had an open house on Saturday, and by luck found a new house we liked at an open house the same day. The new house is in a neighborhood we didn't know a lot about so we had to research it quickly. We decided within a few minutes that it would be a good place for us using information on the internet such as Google Maps + Street View even though we hadn't really considered it in the past. It helped that the seller had professional photos posted on the listing which showed off the house well. We went to the open house and had to put in an offer on the new house above asking. The new house appraised below what we asked so we sent our realtor back to renegotiate the deal. The seller was not happy but she wanted to move on with her life and accepted the lower price.

In a seller's market you need to be able to move fast and make a strong offer. Most seller's aren't going to accept a contingent sale if there's a non-contingent sale available. Sellers don't just want the best price they want to move on with their lives. In a seller's market the buyer has to take some of the risk which may mean taking on the possibility of having to move into temporary housing. As you've already found out lender's generally won't let you carry the old house and sell it after you move. Even if you have the income to support both mortgages the will want to see a one year lease on the old house.

Stan, good insight...

Now I'm wondering...

Will lenders allow two mortgages if you explain to them you're selling one and have let's say 30k-50k in savings - (enough to make several payments, plus a solid work history)?

The only issue I see is if you have a good chunk of equity. You might not get that $$ in time for the new purchase. I have heard of bridge loans, but they seem tricky.

FeatherBee, in our experience as well as some of our friends the answer was "no, you need a one year lease agreement on the old house to close on the new house" but others might get a different answer. This was true even with good income, employment history, and substantial liquid assets not tied up in real estate. We live in an area where about 3 offers within 5 days are "normal" on a house offered for sale priced near comps.

The issue for me if I were a seller is that I'm now dependent on how realistic the buyer is about the value of his/her home. I see a lot of people doing the "If I could sell my house for X, I'd buy house Y", which in reality is something like "If I can sell a dollar for a dollar and a nickel I'd do it". And even if they are correct about the pricing, now I have to worry not just about inspections/appraisals/buyer financing for one home but for 2, one of which I have no control over.

Finally, if I were to accept the contingency risks b/c it's a much higher offer, I would never allow an appraisal contingency for the buyer - that's like a have my cake and eat it too thing.

Obviously in a buyer's market this would all change, but that doesn't seem to be the case for the OP.

Will lenders allow two mortgages if you explain to them you're selling one and have let's say 30k-50k in savings - (enough to make several payments, plus a solid work history)?

Lenders will allow as many mortgages as you qualify for. Personally, at the moment I have five mortgages (two were purchased as investment property, so I am not sure if you should count them). You don't need a signed lease or anything else if you qualify for the mortgage with your income. However, lenders will have requirements for when rental income can be counted in your income. Some want a year's lease signed, which is pretty easy to get. Others will require a few months of rental income history, which will require you moving out of the house and into an apartment for a few months.

The options that are best for you really depend on your current mortgage, your current income, and your total expenses. At the moment, I move before listing a house, this certainly costs me more money but I have a little dog who is not very nice to realtors and even if crated or garaged will bark the entire time. My wife has made it clear that we will spend the extra money to move and market rather than in any way inconvenience the dog. Since I would like to wake up in the morning, I agree.

Hahahahaha bry911 - I enjoyed reading your last comments. We have two dogs, one that doesn't shut up so I know the struggle with animals.

You said "Lenders will allow as many mortgages as you qualify for. "

That's my worry. My current mortgage is about 25% of my take home pay so I don't think they would give me another loan if they didn't take into consideration we'd be selling our old home.

I guess I just need to call my local credit union. Their 15 year loans are financed in house so maybe they'd work with me since it's their money and all my savings is with them.

freeoscar "if I were to accept the contingency risks b/c it's a much higher offer, I would never allow an appraisal contingency for the buyer"

Very good point.

If I were to make an offer on a home, and I went in over asking, I'd still need an appraisal for loan purposes but I'd let the seller know I'm willing to pay over X amount given the fact my offer has a contingency (me selling my old home). I think that's fair.

Furthermore lets say my little dream log cabin pops up at 179k. Maybe I offer 185-190k depending on how many other buyers are interested... Then I write the seller a letter letting them know my current home has 100k equity in it (meaning I have wiggle room with the price so I'm not desperate) and that homes in my neighborhood go under contract within 1-3 days. I think explaining this and showing them the #s on paper would help make my offer strong. I don't know how someone would pass up 10k in this case, especially since we're talking less than 200k home.

My mom went in over asking with a cash offer (403k) and she didn't get the home. The realtor told us - it's the highest bidder that wins. I guess each market is different.

"Let me get this straight. You have enough money to where you don't have
to worry, yet you take the lower (more than 10k) offer because it's
safer? Am I missing something here?"

Yes, I would take the lower offer if the contingency is the buyer selling the old house and finding a new house. Knowing some people and how they make decisions, this process could go on for ages. Not to mention that it basically allows the buyer not to follow through for whatever reason. Best case scenario, you have a time limit and are back to square one once that expires.

We will be listing our house within the next 8 weeks, in a fairly warm market - and in a neighborhood that has finally "turned the corner" and is in demand again. Yay for us. We have no idea where we want to go from here, and have agreed that we're going to move into a smaller (900-1,000sf) apartment for at least a year. That will give us time to decide what we're going to do - keep renting, buy an existing house, build a house on land that we may purchase, or move overseas.

Renting isn't a bad thing, and it's not "throwing money away" because it's paying for a roof over your head and a place to hold all your stuff. :)

Soccer mom, the scenario I'm referring to is when the buyer already has a home found, so the buyer just needs to sell their own.

I've been faithfully following along on this forum for around 4 years since house hunting, and 3 years ago to the month closed on my current home. I sold my original house this past December, so carried two mortgages with all the associated expenses, for nearly 2 1/2 years. I had planned on the process taking a year or so, as I was having the new place renovated, and didn't move in for a little over a year, but didn't expect the additional time that was needed to get my old place fully emptied and repaired. When it was finally listed it closed in under 3 months. The extended process was stressful: due to some medical issues could do little myself, and needed to hire help for everything, which was hard to come by and created lots of delays. But the bank had no issues. I'm single, not at all young, but have excellent credit and not a lot of extraneous expenses that others often have, so I may have looked better on paper than some couples with much better incomes. For example, no matter how small or high my credit card bill, I pay it off monthly. I have no cable bills, (OTA antenna) no cell expenses (tracphone) no car payment (2004 new car paid off 12 years ago) etc. etc. Aside from mortgage and property taxes, just car and home insurance, utilities and on the credit card, food and gas.

So don't assume that a bank will have problems with carrying two mortgages if you have crunched the numbers and decide it is doable. My homeowners insurance was aware I was buying and not selling right away, and never had a problem, although I've heard some are not ok with it.

What I would say, is, if you know you would like to move, and haven't already started, begin to ruthlessly go through to rid possessions and making those large or small repairs to the current home NOW so you can be ready to act quickly if and when the time comes. I certainly don't recommend my path, but it was the only way for me.

Well said - Indigo Rose .

It's good to hear you were able to swing two mortgages. And I admire that you keep bills to a minimum and forgo cable/cell/car payments.

"begin to ruthlessly go through to rid possessions and making those large or small repairs to the current home NOW so you can be ready to act quickly if and when the time comes" Excellent Advice

I couldn't have said it better. I've gotten rid of so much crap yet I still have more to go. But it feels good getting rid of stuff I don't really need. We also just replaced two bad windows (it wasn't cheap) but I knew they would pop up during the inspection. Next is our deck... I couldn't imagine putting all this work and repairs off until the last minute when that dream home pops up... I'd rather do a little over time and be better prepared.

"We also just replaced two bad windows (it wasn't cheap) but I knew they would pop up during the inspection. Next is our deck... I couldn't imagine putting all this work and repairs off until the last minute when that dream home pops up... I'd rather do a little over time and be better prepared."

^^^So true!. I can't tell you the number of homes I have shown with deferred maintenance (a polite way to say they are in disrepair). The buyers always calculate the repair costs much more than reality plus they add for the hassle factor of having to make the repair. Some buyers just won't consider any home that needs repairs. You are very wise to do the repairs now rather than let the buyer decide how much they think it will cost and deduct an out-sized amount for whatever needs to be done.

Let me get this straight. You have enough money to where you don't have to worry, yet you take the lower (more than 10k) offer because it's safer? Am I missing something here?

I would think if you're well off then you could take on the risk of the higher bid in hopes of receiving more than 10+ thousand...

Was your market tough or something or is 10k not much money to you?

I'm poor btw so forgive me if my comments/questions come off as rude..

Yes because the lower amount was a cash deal.

If someone has to first put their place on the market, and then hope it sells, how long can that take and more importantly, if it doesn't, then I've wasted weeks or months being off the market. My condo is in FL. It's a seasonal area, meaning after the first of May, sales are harder to come by, so when this buyer said she'll give me $$$ in March, we said yes.

If the higher deal falls through, how much is it costing you each month to maintain the place vs selling for less?

What's the old saying? A bird in the hand?

Something I failed to mention, and I guess this must be different in different states or markets, but if a seller had accepted our offer with the contingency, the home would have still been listed as active until we had a signed agreement on our home. There would be a kick-out clause, where if they received another acceptable offer, they would give us 48 (or 72?) hours to drop our contingency or else they could move forward with accepting the other offer. So in that case I don't think it's quite as much of a risk to the seller as maybe some would think. If they would have had no other offers, I don't think it would be totally far-fetched to accept ours and see what happens.

So, you already knew your answer.

@featherbee, wouldn't make a difference if contingency is "only" selling the current house for similar reasons as cpartist's. Of course, it also depends on what percentage 10k of the overall price is. I live in an expensive area.

Agree with nosoccermom. What percentage is the $10,000?

All very good advice.

I have a silly question. You have three children, which includes infant twins. At some point, the twins should move into the larger bedroom and your oldest get the small room.

You say you are on your dream street. For this reason, I would look into renovating. I know you think you need a large yard, but it really isn't necessary. Kids nowadays are involved in sports and don't need a lot of yard space at home. If you have room for a swing set, you're fine.

In my neighborhood, whether you have a large backyard or not, the kids are always in their front yards.

Thanks for explaining cp and soccer mom. It's good to hear other view points.

The the OP, when homes in my area go under contract with a contingecy, the status always says "no kickout" ...

I look at homes all day long. The status is either active, pending, option, or contingent no kickout.

I had a similar situation a couple of years ago, I had to relocate unexpectedly. My former home was in a hot seller's market with low inventory, the area I was moving was even more so. I started looking for a home in the new area before I listed my house for sale but both agents (one for my old house and one for the new area) advised that a home sale contingency would make it very hard for me to get an offer accepted.

So I took the plunge and listed my house for sale. I had two full priced offers the day after the house was listed. One was from a family that planned to rent the house for a year or so before moving in, they wanted a three week close, so we were able negotiate a rentback for six weeks with an option for two additional months (total of about four months). It was the ideal situation for me.

Once that sale actually closed I felt like the clock was really ticking to find a new house, it was extremely stressful driving back and forth to look at houses, and after a few weeks I did start looking for a rental as well. BUT I eventually (six weeks) found a great house in the perfect area, put in a full price offer with the only contingencies the inspection and financing (which I already had been preapproved). It was also stressful making that quick decision to buy a house that had a higher price than I had planned to spend after looking at it for a few minutes. Having a great agent to help me make that decision really helped.

I agree with the poster who advised you to get your current home in tiptop shape and list it. Just be prepared to make a really quick decision on that next house.

Practically everything is negotiable in a sales/listing contract....list your home with the contingency that you have "X" number of days after accepted offer to find a new home. Your agent will need to disclose this to potential Buyers (preferably) or you can counter-offer this into your contract...."Seller has "X" number of days from effective date of contract to obtain accepted contract on a property or this contract is null and void".

Buyers tie up a home/property with contingency of inspections, appraisal, financing, and title work so why shouldn't a Buyer allow a Seller to have a contingency? This type of contingency is not common in my area but I do know that this has been successfully accomplished by other Realtors in my area.

"Seller has "X" number of days from effective date of contract to obtain accepted contract on a property or this contract is null and void".

I personally would not sign that. I, of course, can't speak for everyone, but there is no way that, as a buyer, I am going to give the seller that type of power in the deal.

I think it would scare away savvy well qualified buyers.

I was preparing to put my house on the market at the same time we started looking for a new home - since I don't have a mortgage where we live presently things were a little different for our circumstances. Put an offer in on a house that was accepted the same day mine went on the market. Luckily there was an offer that was acceptable that came in after a week, the appraisal in line with the list price (which was the offered amount) and we're on our way to inspection and closing.

Timing and having a competent realtor who is a well-respected individual amongst her peers is everything. At least to me. I did happen to also have enough liquidity to cover costs like obtaining a storage/shipping container for all our furniture so that we could get everything out and only have to move it from here to the new place once, and to pay for other home sell/buy miscellaneous expenses.

"I have a silly question. You have three children, which includes infant twins. At some point, the twins should move into the larger bedroom and your oldest get the small room."-eld, I thought the same. I'm not sure whether it increases the chances of your question being silly, or decreases them..:)

off to reading further comments

""Seller has "X" number of days from effective date of contract to obtain accepted contract on a property or this contract is null and void".-null and void would scare me off I agree. Different phrasing, or just communication might not. But that would really depend on a buyer. Besides his circumstances even. Some people you can deal with, and compromise, and figure out things. And some, you can not. And sometimes you won't know in advance

another point to what cpartist and others are saying..a serious buyer. and "serious" implies many things. That's why I'd be always inclined to get maybe less money but more reassurance the sale will happen and won't drive me insane.

I realize it's the opposite sides of the coin I'm talking about..:)

My point: many things can be figured out on individual basis. To put them flat out in the contract like that kinda predisposes you to see this.. basis in a certain way. And react to it in a certain way. I guess.

My perspective on buying a house contingent on the seller finding satisfactory housing to purchase. Note: this is just how I would react, not general advice or anything else. If it helps, great. If it doesn't help, that is OK too.

Sellers should list homes for sale when they are ready and committed to selling the house. It is unfair to buyers to "dip your toes" in the water and see if things work out. If I am fully committed to purchasing your home I want you fully committed to selling your home. Even though the seller may have the best of intentions, that is a huge safety net for them and essentially means they risk nothing in the transaction.

In the meantime I have to pay for due diligence inspections for a sale that may never go through because the seller didn't find any inspiring properties.

I may not represent the typical buyer, but I think most realtors would warn their client about the potential problems of that kind of kick-out clause. Maybe I would consider it if their was a payment required to exercise the clause.

Many people may do what you want and it goes smoothly. However think for many it does not. We put our house on market to sell spring of 2016 with intention of selling first and then buying. We had two offers in a week and accepted one. They got prequalifed, had the inspection done and appraisal. Appraisal came back 10k over our asking. Thinking we were safe we went ahead and put our contingent offer on land that had just come on market. Our area is fast growing and finding larger wood lot is rare these days. BUT then a couple weeks before closing they backed out. They separated. Awkward.

Still had time on our land contract. So we put it back on market and got another offer in a week. What was supposed to be closed in 30 days took twice as long and was very stressful. They put a non contingent offer in. BUT it really was contingent. We could could have walked away and not signed an extension. But it had already been 30 days when they fessed up. The seller of the land was purchasing another property and needed to be sold by a certain date. But he gave us an extension after getting an extension on his end.

You don't know how many people there are that could affect your transaction. If you do a contingent offer and that person does one on their property and keep on going... one person has a problem and everyone is at a standstill. Worse you miss the busy season and end up having to reduce the price to get sold.

Sell then do a temporary rental. Or see if there is a way to structure finances to be able to qualify for both houses. Maybe a cosigner?

In the meantime I have to pay for due diligence inspections for a sale that may never go through because the seller didn't find any inspiring properties.

Potential Buyers Inspection/ Appraisal contingencies do not start until Seller removes the contingency of placing another home under contract and yes I know there are lots of issues that could stop the actual closing on the purchase of another home.

This might not be appropriate for everyone but one short term liquidity strategy people sometimes use is to borrow from their 401Ks to cover the down payment/closing costs on the new house for a few months until the old house sells. As soon as the old house sells they repay the 401K loan(s) with the cash received at closing. It can be a helpful strategy to improve short term liquidity but there are some obvious risks if you aren't completely confident in your ability to follow through and repay the loan quickly. To me there's a key difference between paying the 401K loan back within a few months vs. taking the loan out for multiple years (which I personally would not do although I know people do take out long term 401K loans for their homes).

In an active market, which has been happening in my area for the past many years with ever-rising prices, contingencies of any kind are as welcome as contracting a fatal disease. Even inspection problems, unless mega major and involving costs of multiple whole percents of the house's value, get swept aside or dealt with quickly.

For sellers, unless a house is very special and unique, buyers would avoid one having anything delaying escrow and close in the normal period of time. Which has become very short, sometimes just a few weeks.

For buyers, you'd hear the equivalent of "If that's the best you can do, please step aside, there are 5 people behind you ready to sign stripped down and uncomplicated deals, talk turkey and close escrow in a few weeks." It's not unusual for signed deals to be bested by higher offers the next day or two.

That's my area. Real estate is local, it's different everywhere.

I have three kids, in three different schools, and with our last move, I found it less stressful to secure an apartment, sell our house (while we were not living in it), then buy a house at our leisure. We ended up selling our house and buying a property a few months before our lease expired, and didn't have to pay rent for those months. Rental folks LOVE people who are in a position to buy a house. We were given our deposit and back rent when we broke our lease. And although it was hard to cram 5 of us in an apartment, we had time to look at the market and find the perfect house.

Yep^^^. handmethathammer has the right idea. S/he is totally free to make a decision without financial constraints when you are renting and your last property is already sold and closed. BTW, many of us have moved twice (to a hotel or rental depending) when selling our previous homes. I have found that when the current home is under contract, the seller turned buyer opens up their minds to include properties not previously considered.

We got a climate controlled storage and put most of our stuff in there once under contract. It was kind of nice packing slowly, purging as we did and making small trips to storage unit. Kept just the basics so we could rent a smaller townhouse. Will miss how low maintenance this place was. No yard work! We will be closing this week. We will move townhouse in one small uhaul. Then take our time moving the storage unit stuff over the next month. A pain? Yes. But not as bad as it seems. Also helps that two of my kids are now teenagers and can carry boxes!

In our area we put "seller to find suitable housing" in the listing. This alerts buyers that the seller is looking.

^You see that here too in the MLS and it kills showings. Most buyers want to buy a home to move into and not get under contract for X days only to have the deal die because the seller couldn't find a suitable place. It wastes time for the buyer - and money if they have made mortgage application and done their inspections like their contracts state. Even if you put in a kick out clause, you limit your buyer pool substantially. Either sell it or don't sell it but don't tie up a buyer's resources on the off chance you might actually close.

We sold our place last year and have been renting for the past year while our house is being built. It's so nice not to have to worry that we may or may not sell our place.

In a hot market, the most attractive seller is one free of encumbrances. You want to be that attractive seller. Otherwise, you will be continually beat out by them and it'll drive you crazy with the emotional ups and downs of finding something, losing it to someone better prepared, finding another etc.

On the next offer you present, go over the asking price to a point that negates the contingency. You'll be protected by the appraisal.

NC im surprised you made this comment. A good listing agent would never fall for this. I would always ask for the buyer to waive the appraisal contingency if bidding over asking price, otherwise, their offer is an empty offer.

^^Or pay the difference in cash above the appraised value. Depends on your market.

To the OP. Could you offer to pay them a fee if the contingency doesn't get met. That is, offer to pay them something if you aren't able to sell your house? FWIW, I think in your situation what I would likely do is list your house and start looking hard for another house. Offer when you have your house under contract. Still a contingency but one that the seller may not mind that much. If you don't find a house during that period, then just rent until you find something else. Yes, I know it is inconvenient but may be the best realistic option.

"On the next offer you present, go over the asking price to a point that negates the contingency. You'll be protected by the appraisal.

NC im surprised you made this comment. A good listing agent would never fall for this. I would always ask for the buyer to waive the appraisal contingency if bidding over asking price, otherwise, their offer is an empty offer."

How does the appraisal work when financing is involved? And, If you waive the appraisal contingency and the # comes back lower, does that mean the buyer has to come up with the difference?

@handmethathammer, you said:

"We ended up selling our house and buying a property a few months before our lease expired, and didn't have to pay rent for those months. Rental folks LOVE people who are in a position to buy a house. We were given our deposit and back rent when we broke our lease."

Forgive me, I don't understand. Why would your landlord be happy you were breaking your lease, happy enough to not charge your rent for those months? I'm renting and feel like I can only be at a very specific month: when my lease is up. That's what my lease says, or else I have to pay them rent through the end of the lease, unless they happen to find a tenant to replace my exact apartment. So I'd like to understand what you did there.

mwedzi, we were up front with the apartment rental agent that we were in between homes. Every month, when I brought my rent check in, they asked, "Did you sell your house?" When our old house did finally sell, and we found a new house, we told them and gave them a date for moving out. It was a month and a half before the lease was up. We were prepared to be responsible for that last month of rent. You are right that is in the lease, but they rented the place quickly and reimbursed us the half a month we paid for already and we didn't pay for the last month. We also got our entire deposit back.

Landlords like folks who are in a position to buy a home because they tend to take care of the place and get their rent in on time. I suppose it is because they have their financial stuff in order enough to be in a position to buy.

Hey Linda,

In 15 years of doing this I have never had a listing agent ask my buyers to waive the appraisal contingency. Here, most multiple offer situations are resolved with the winner only offering a relatively small amount over the asking price. Maybe that is why the appraisal contingency removal is not a big deal here.

It's definitely market dependent ncrealestateguy. We do have the request in the MLS to waive the appraisal contingency, but it is more common in our area to renegotiate the price after the appraisal. If the property is in a desirable, difficult to attain area, then the buyer typically pays the difference between the appraised value and the ultimate sales price. Sometimes the buyer and seller agree to meet somewhere between the appraised value and the sales contract price. Sometimes the seller will agree to drop to the appraised value. It is neighborhood specific here.