Watch this mastermind on how a buyers agent should approach a listing agent with a contingent offer in a seller’s market.
Today we are talking about how to get a contingent offer accepted in today’s seller’s market. It’s not easy, that’s for sure! But, in this Zoom mastermind, we discuss how to navigate the conversation you should have with the listing agent to give your buyers the best chance of getting their contingent offer accepted. Or, better yet, how to avoid making contingent offers, to begin with.
VIDEO: How Realtors Can Get a Contingent Offer to Purchase a Home Accepted for Their Clients
Talk to the listing agent
If you are absolutely unable to convince your buyers to remove the contingency in their offer, you need to be upfront with the listing agent. The conversation can go something like this.
I have a great buyer, but their offer is contingent. I’m sorry, I know that’s not ideal. So, what can we do for you and your client to make it as easy as possible, and get my buyer’s contingent offer accepted?
How can you put the seller at ease? Start with an apology and then come at them earnestly offering to help as much as possible. The reason why you are apologizing is that as an agent, you were unable to get your buyer to be able to remove their contingency.
Ask yourself: Why is there a contingency?
Most people cannot afford to have two houses at the same time. And some can’t qualify for a loan on an additional house, regardless. So, they need to sell their existing house (or have an offer accepted) before they can buy a new house.
Very rarely does a contingent offer get accepted. Make sure you educate your buyers so they know this upfront. In a very competitive seller’s market, where multiple offers are coming in over asking, why would the seller accept a contingent offer? Accepting a contingent offer is basically forfeiting control of your own home’s sale. Suddenly, the seller now has to wait for the buyer’s home to sell. It’s not a great place to be in as a seller. Your buyer should be able to relate to this because they are also selling their home!
So, if most people can’t afford to have two houses at once, why is it than less than 1% (estimated) of homebuyers buy on contingency? It’s because the buyers’ agent is able to reassure the buyer that it can work without needing a contingency.
So, now what?
To avoid making a contingency offer, here’s what you should have your buyers do.
- Get your buyer’s house on the market. Better yet, get it in escrow. This is much more attractive when you’re making an offer.
- Include a contingency in the sale of your buyer’s current home. This is where the contingency can be placed. Accept a good offer, go into escrow, and make sure the contingency states that the sale of their current home won’t go through until they find replacement home.
- Write your offer and talk to the listing agent. Explain the status of your buyer’s home. Make sure it looks good, either it is on the market and offers are coming in, or it is already in escrow. Either of these is much more promising! No contingency offer needed.