Contingency offers are back in vogue in the real estate market today. This week, Michele and Randolf shed light on what contingent offers are, why they are gaining traction, and the risks involved. This article explores the reasons behind their resurgence and the crucial aspects buyers and sellers need to consider.
What are Contingent Offers?
A contingent offer means there are specific conditions that must be met before a sale can be finalized. Many types of contingencies exist. For instance, a buyer might want to review and finalize details about a unique feature of the house they are interested in. But the most common contingency arises when a buyer is also a seller. In such cases, they need to sell their existing home before they can afford to buy a new one.
The Rise of Contingency Offers
As Randolf and Michele mention in the video below, a recent buyer of Randolf’s was keen on a property in Vancouver but had to sell their Portland home first. Initially, the first listing agent declined the contingent offer, but the second listing agent was open to it. This shift in attitude indicates how the real estate market is evolving.
Reasons for the Resurgence
The resurgence of contingency offers can be attributed to changing market conditions. During the pandemic, getting an offer accepted was arduous for buyers. But as the pandemic’s impact waned, the market shifted, giving buyers more power and flexibility. As a result, buyers are now more willing to present contingent offers, even when competing with non-contingent ones.
The Importance of Strong Offers
Though contingent offers are gaining acceptance, buyers need to craft compelling offers to stand out. Beyond the contingency itself, other terms and conditions in the offer can sway a seller’s decision. To enhance their chances of success, buyers should work with professional realtors who can guide them in presenting strong offers.
Buyers making contingent offers should be aware of the risks involved. A major concern is the possibility of being bumped out of the deal if another non-contingent offer is accepted by the seller. Timing is critical when selling one property while purchasing another, as it involves multiple parties and deadlines. To navigate these complexities successfully, buyers should enlist the help of experienced realtors who can manage and mitigate risks effectively.
The Role of Professional Realtors
Professional realtors play a pivotal role in assisting both buyers and sellers with contingent offers. They provide valuable insights, explain options and risks, and help clients make informed decisions. With their expertise and market knowledge, they can navigate the intricacies of contingent offers and ensure smooth transactions.
The real estate market is witnessing the resurgence of contingent offers, empowering buyers who are also sellers to act confidently. While contingent offers were once daunting, current market conditions are more conducive to their acceptance. However, buyers and sellers must stay informed about the risks involved and collaborate with experienced realtors to navigate the process smoothly.
Whether you’re a buyer looking to make a contingent offer or a seller considering accepting one, it’s essential to partner with professional realtors who can guide you through the process and represent your interests effectively. The return of contingency offers presents opportunities and challenges, but with the right approach and support, it can lead to a successful and rewarding real estate experience.