Will the Backup House Sell in Time?
In addition to the usual contingencies for Inspection and Financing, the Buyer making a Contingent offer for a house is adding a third, big one: that’ll they’ll be able to sell their current home — what Realtors call “the backup house” — within 60-90 days.
In turn, the salability of the Buyer’s backup home depends on such things as the home’s style and general condition; how well it’s prepped, priced, and marketed; and the price point (lower = faster sale, usually).
But, undeniably one of the biggest variables is always market conditions.
“Seller’s Market” Side Effects
Cue the Twin Cities’ Spring, 2016 housing market: very low inventory, still (very) low interest rates, and a good local economy churning out lots of qualified Buyers. See, “The Twin Cities’ ‘Goldilocks’ Housing Market.”
Not everything is selling, of course, and certainly not right away in most cases (let alone in multiple offers), but in general, good homes at good prices in good locations are finding Buyers.
Which means that Sellers contemplating a Contingent offer now can be more confident that their Buyer will perform (i.e., sell their current home).
Especially if the deal’s other terms are attractive, that makes it easier for them to say “yes.”
P.S.: “Trust but verify”: listing agents (representing the Seller) can and do request details about the backup house — and check them out.
See also, “Why Contingent Offers Are Making a Comeback (They Are)”; and “Why Sellers Don’t Like Contingent Offers — & How to Overcome Their Reluctance.”
