I regularly hear from buyers who need to sell their houses in other states before they can buy a Sequim or Port Angeles home.  After filtering through the online MLS and finding the perfect home, their question is, “Will the seller consider a contingent offer?”  What they are asking is will the seller accept an offer if they can agree on the price and terms, contingent upon the buyer selling their home, wherever that may be.  There is an answer to that question, and while the seller is the only one who can answer it, there is a logical set of issues that the seller will consider before answering it.

This Beautiful Custom Sequim Home May Receive a Contingent Offer. To learn more about this home, click on the photo for details.

First, the seller wants to sell his home, so he’s motivated to accept an offer, even if it has a contingency, . . . provided there is a reasonable probability that the buyer can actually close the transaction.  That’s the big proviso.  A motivated seller will accept a contingent offer if there is a good chance the buyer can perform and close.

The second step is answering the question, “What would qualify as a ‘reasonable probability’ of closing?”  Well, let’s break that down.  If the buyer owns a home in Phoenix where there are thousands of homes in foreclosure, where developers have overbuilt and entire subdivisions stand unfinished, and there is a serious glut of existing inventory, it probably is not likely this Phoenix seller (and Sequim buyer) is going to sell their Phoenix home soon, or at least within a reasonable period of time.

What is a reasonable period of time?  A seller who accepts an offer must have assurances that the transaction will close within 30 to 90 days.  Anything beyond that is simply too long.  There would be no reason for a seller to accept an offer that was so speculative no one could intelligently guess when it will close.  So a contingency must not be a speculative contingency with little probability of happening.

A logical seller when presented with a contingent offer from a buyer who first needs to sell their own home will want assurances that the buyer can sell their home soon.  That will require some proof that the buyer’s home can be sold, and that could come in the form of a letter from the buyer’s Realtor with some further documentation and telephone discussions.  The seller may require more, and understandably so.  A seller may say, “If the buyer is so sure she can sell her home and have the funds to close within 30 to 90 days, then tell her to first sell her home and then come back and we’ll ink this deal.”  That’s a reasonable response.

Since the real estate markets around the country have been so slow, few sellers are willing to accept this kind of contingent offer that is a speculative contingency.

Possibly Related Posts:

• Washington Real Estate Forms Updated
• Port Angeles Real Estate Law and Sequim Real Estate Law
• Due on Sale Clauses

Washington real estate forms are constantly changing with additions, deletions, and new forms being added periodically.  If you are buying or selling real estate, you definitely want to be using forms that are required by state law, by your county or local jurisdiction, and you’ll most certainly want to be using forms that have been through the legal analysis and editing process for many years.

The danger in not using up-to-date forms and not using forms that have been standardized through the legal process is that you could be sued and lose on the basis of using non-standard language, or ambiguous language, or language that has been interpreted by case law to be invalid or not in your favor.  Using the correct forms is critical, and do-it-yourselfers could end up with a transaction that dies before closing, or worse yet, a transaction that closes and a year later you learn you are a defendant and must spend $40,000 on an attorney to protect yourself.  This is one of the Traps for the Unwary that I write about.

I wrote an article listing most of the standard forms that we use in Washington now, and you can see that list at What Forms Are Required to Sell or Buy Real Estate in Washington.  It’s a lengthy list.

On December 21^st, the Northwest MLS (NWMLS) will publish revisions to ten existing forms and publish two new forms.  The most significant revisions are to Form 22A (Financing Addendum) and Form 22AR (Financing Contingency Notice).  Realtors who are members of the NWMLS, or who purchase the NWMLS forms have access to all of these forms, and we get the updated forms immediately as they are published.

Possibly Related Posts:

• Will the Seller Accept a Contingent Offer?
• Port Angeles Real Estate Law and Sequim Real Estate Law
• Due on Sale Clauses

Did you know Port Angeles and Sequim (and Clallam County for that matter) have an online resource for local real estate law?   Back in 1995 Chuck Marunde built his first website while practicing real estate law, and it became a very popular online legal resource for people around Washington state.   Even professors used it in Pierce and King County.

That site’s progeny lives on today with megabytes of real estate law, statutes, articles, checklists, and links to actual case law.   Want to know how a foreclosure works on either a deed of trust, or how a forfeiture works on a land contract?   You’ll find it there.   Need a comprehensive checklist for buying land?   Want to know about excise tax fraud?   Need to know about adverse possession or an easement by prescription?   Do you have a fence line dispute with your neighbor, or does your neighbor’s tree branches overhang your fence?   You’ll find the answers and much more at:

FreeRealEstateLaw.com

Another valuable service brought to you absolutely free by retired real estate attorney Chuck Marunde, J.D., now your favorite Realtor in Sequim and Port Angeles.

Possibly Related Posts:

• Will the Seller Accept a Contingent Offer?
• Washington Real Estate Forms Updated
• Due on Sale Clauses

Question:  My father in law recently died and he and my mother in law were on title to their home (as husband and wife) and they have a loan on it.  Now she wants to add my sister in law to title and they would be joint tenants.  Does that constitute a change in ownership?  I’m asking because I want to know if the bank could call the loan due.

Answer:  Technically, yes.  If your sister-in-law inherited, the loan would not be callable, but by transfer with a QCD, it is a transfer that would trigger the due on sale clause.

But here’s the reality.  I’ve never seen a bank actually enforce the due on sale provision, and the only apparent situation in which they would consider doing it would be with a blatant attempt to have new buyers assume the loan through a third-party escrow.  (more…)

Possibly Related Posts:

• Will the Seller Accept a Contingent Offer?
• Washington Real Estate Forms Updated
• Port Angeles Real Estate Law and Sequim Real Estate Law