If you found the house you want to buy, but need to sell your house first, you should consult with a real estate attorney before placing an offer on the house. Attorneys that specialize in real estate can help you write up your purchase offer in a way that protects you and the earnest money you will be required to put down. Here are three things you should know before you do this.
You must include a time frame
The seller of the house can deny your offer for any reason, but there is an even greater incentive for a seller to deny an offer when it has the contingency that the buyer must first sell his or her home. Because there is a chance that you will not sell your home, the seller may only agree to accept your offer if there is a reasonable time frame, such as 30 or 60 days.
You are free to include any amount of time you wish, but keep in mind the seller will not be able to sell the house to anyone during this time. If you cannot sell your house, the seller would have wasted his or her time accepting your offer and waiting for your house to sell.
Seller may only agree if there is a bump clause
Your lawyer may explain to you that the seller could ask for a bump clause. A bump clause would allow the seller to continue looking for buyers, and if someone wants to make an offer that is not contingent upon the sale of a house, the seller would have the right to void your offer and accept the new offer.
If this happens, you would still have the right to buy the house; however, you would have to waive the contingency part of the deal. This would mean you would have to purchase the house before you sell your other house.
Reason a seller would accept this type of offer
Many sellers do not want to tie up the sale of their homes with contingency offers like this, but a seller might be more willing to do this if they look into your house and find that it is priced right, and if it appears that your house will sell quickly.
If you want to protect yourself when making an offer on a house, contact an attorney's office like Valentine & Valentine PC today for assistance.