Question: My family and I recently placed our home for sale. Within three days, we received an offer to purchase. However, without a home to move into, we don’t want to be forced to sell. How can we lock in our buyer, yet avoid committing to the sale?
Answer: Because you rarely find your dream home and meet the perfect buyer on the same day, timing is a major consideration. Many consumers assume that only a purchase and sale agreement is fully binding, and haphazardly accept offers to purchase. However, a standard offer form contains enough contractual terms to be enforced by a Court.
Typically fraught with buyer’s contingencies, it unevenly assigns obligations to the parties. An offer is often contingent upon a satisfactory home inspection, allowing a buyer to back out of a deal without harm. Moreover, should a buyer default by simply changing his mind, he usually only loses a small deposit. On the other hand, a seller is bound to sell his home immediately upon acceptance of an offer to purchase.
Recent market conditions gave birth to a common seller’s contingency. “Subject to seller finding suitable housing” is a disclosure gracing many current listings. Marketing your home with such a distinction, or including related language in your acceptance of an offer, informs potential buyers that you are only partially committing yourself to the sale. Specifically, your sale is not final, until you locate or contract to purchase a new home.
Obtain legal advice for proper wording to identify the point in time you become committed to the deal. A perfect scenario would find your contingency open until you not only sign a purchase and sale contract for new suitable housing, but obtain a mortgage commitment as well.
Attorney James Haroutunian is a Billerica native who runs the Haroutunian Law Office at 630 Boston Road, Billerica, specializing in real estate law including landlord/tenant and estate planning. James invites questions from local real estate agents as well as consumers at 978-671-0711, prioritylaw.com or by email at email@example.com.