Although it’s not ideal, there are times when home sellers are more inclined to accept offers to purchase from buyers who still have to sell their existing homes.
Without a date, adds Everitt, the agreement could become ‘open-ended’, with the seller unable to terminate, or to sell his home to any other buyer as long as the original bidder is not in breach on any other point.
This is certainly the case in the current market, where there are still more sellers than potential buyers, says Berry Everitt, MD of the Chas Everitt International property group.
“However, both parties need to take really great care when filling in an offer containing a clause stating that the sale is subject to or contingent upon the buyer being able to sell his own home,” he says.
For example, Everitt says the seller must make sure that the agreement contains a specific date by which the potential buyer must either sell his other home, waive the contingency or cancel the whole agreement.
Without a date, he adds, the agreement could become ‘open-ended’, with the seller unable to terminate, or to sell his home to any other buyer as long as the original bidder is not in breach on any other point.
Everitt says that on the other hand, the buyer also needs to know that he has until a certain date to sell his existing property. Failing that, he could end up in deep financial trouble, liable to pay for two properties from the day the home loan for the new property is approved.
He cautions that the sale agreement should also clearly state that if the potential buyer does fail to meet the deadline, it will be him who chooses whether to waive the condition or void the sale agreement, and not the seller.
“In short, contingent sales can be quite tricky, and both buyers and sellers are thus well-advised to deal only with qualified, experienced estate agents who will ensure that their sale agreements are correctly drawn up and filled in,” says Everitt.
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