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Old 05-20-2019, 12:56 PM
Tired and Cranky is offline
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Join Date: Dec 2014
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Quote:
Originally Posted by CairoCarol View Post
I saw my dream house for sale and looked up the MLS; it is listed as "contingent" and has been for at least 10 days or so now, maybe longer. The info available explicitly says that the sellers have an offer but are still taking other offers.

My assumption is that a couple of things might be going on. First, the current owners are trying to sell two adjacent properties, one with a house (that's what I want) and a pasture next door. They would love it if someone would buy both together. I would imagine that selling the house alone is easier than selling the pasture alone and that they are disappointed but not surprised to have an offer on the house only.

Second, I suspect someone has made an offer and is waiting for the bank to approve the mortgage they want. So while the bank decides whether or not to give the loan to the prospective buyer, the seller is open to better offers, "better" most likely defined as "a reasonable price for the two properties together."
There are a lot of common contingencies in real estate offers, including the buyer getting a loan (financing contingency) like you describe; the house "passing" inspection whether for defects, radon, lead, foundation, termites, water intrusion or what have you (inspection contingency); the house being worth enough to an independent third-party (appraisal contingency), or the buyer being able to sell his or her current home (home sale contingency). These types of contingencies generally allow the buyer to back out of the contract but not the seller. So, the seller can continue to field new offers from other buyers but, if all the buyer's contingencies are resolved, the seller will have an enforceable contract to sell the property to the buyer. The seller can't just decide to take a better offer that comes in later. The seller will accept one of those later offers only if the primary contract falls through.

If the house goes back on the market, it's most likely because one of the contingencies didn't occur. If it was an inspection or appraisal problem, the house is most likely going to drop in price after the failed contract to account for the new information. If it was a buyer problem, the price still might drop. The seller accepted the best available offer which probably meant the highest price. Since the buyer willing to pay the highest price has now dropped out of the market, the other potential buyers are probably making lower priced offers. Furthermore, if the seller was under some time pressure, that pressure is even more acute with the time lost on the first contract. The seller may be more willing to deal for a buyer who is better positioned to close quickly.