I was talking with a book distributor yesterday who asked me about contingent sales. A contingent sale is a sale that is contingent on the buyer’s other house selling first. In fact I did recently do one. The house to be sold wasn’t even listed yet! The story will be added to the -soon to be released- 2nd edition of Winning Seattle Real Estate.
This happened less than 2 years ago. We will call the seller M. M had been getting her house ready for market while she was also looking for a condo to buy in Seattle. We were about 2 weeks away from listing her house when we found the perfect condo with a 180 degree view of Lake Union! The condo had just blown past its bid review date with no offers. People who have read my book already know that it is fairly common for houses to get NO offers on the bid review date (in spite of what you hear in the news).
The seller and listing broker of the condo had put it on the market without staging or even bothering to clean or paint it. After they had no offers on it, they decided to go back to square one and do everything right. By then it was too late because it had been on the market for about 15 days. Buyers in this market think there is something wrong with a property if it has been on the market more than about 10 days (usually its true). I realized that it was actually a good price and that the listing broker had simply mis-marketed the unit. The best strategy for the seller when this happens is to drop the price 5% right away and hope to get a bid war started at the lower price. A 5% price drop will make the listing show up as a new listing the MLS and other websites.
I told the listing broker that I would bring him a full price offer but it had to be contingent on the sale of M’s house in Kirkland that was going to be listed the following week. My buyer wanted to come in with a lower price but I am a believer of the old adage that you can have your price or your terms but rarely both. They both agreed -M sold her house and bought the condo which appraised $15,000 more than she paid for it!
There are a lot of lessons in this story but I can’t stress enough that most real estate agents are better at getting your business than they are at doing their job. Luckily in this case I managed to save the listing broker and the seller from having to lower the price while also getting a great deal for my buyer.