Market Wise Q&A from the San Jose Mercury News: The Down Side of a Contingent Free Offer & Acceptance
Q: My wife has always been really good at looking ahead and planning for changes. That’s partly the reason for selling our two-story home in order to buy a one-level replacement property. We do not want to deal with stairs 15 years from now. What we did not plan for was dealing with 25 other buyers. Nor did either of us ever dream of making an “as-is” offer $100,000 over list price and totally void of contingencies. Otherwise, our buyer’s agent informed us that writing any other offer was a waste of time. Is this heavy-handed type of real estate practice really necessary?\
A: No. It is not. Unfortunately, it’s another ill-advised practice that has taken on a life of its own. These sellers and their reps who are at the optimal position of strength unknowingly negotiated themselves into a weak position. They mistakenly believe those buyers and their reps that forego rights to rescind the purchase contract, (waiving contingencies), are “not our problem.” Clearly, listing agents and especially sellers have no idea that 80-90% of the residential real estate claims are filed by buyers with real or imagined problems. If they did, they would deftly negotiate every avenue that maximizes the buyers’ path to being treated evenhandedly. Unquestionably easier to do in a “sellers’ market.
Good consumer-protection for the buyers is solid risk-management for the sellers. Real estate attorneys were late during the dot-com boom to advise brokerages to resist purchase contracts that were contingency-free. Buyers who operated 100 percent of the time under the duress of losing their earnest money deposit make great litigants. Plus, these buyers often claim to be forced to rely on reports from inspectors hired by the sellers. Real estate attorneys know once sellers are sued, the agencies they represent are next. Sellers can protect themselves while obtaining a great price or better by allowing buyers time for their own due diligence. Skilled negotiating tactics employed in any market can and certainly will speak volumes. A seller who treats a buyer fair and square as well as allowing opportunities to rescind a sale calmly states, “If you don’t want to buy my home - please don’t. We can sell it to someone who does.”
Pat Kapowich Certified Real Estate Brokerage Manager (CRB) REALTOR®, ABR, CRS, GRI & SRES Home Sales Expertise and Experience (408) 245-7700