When you receive an Offer To Purchase, you are likely to focus on the price. You might be ecstatic over a close to full price offer, but you should be aware how "contingencies" could affect the likelihood of your successful sale.

 

Almost every offer has a mortgage contingency, stating that the buyer will be able to secure financing for a specific loan. Make sure these factors are realistic. A buyer seeking a 30-year loan at 4% interest with no points maybe hedging their bets if your agent advises you that these loans are typically written at 6% interest with 2 points. Unrealistic terms can allow the buyer to back out if they get cold feet.

 

Another sticky contingency more common these days is when a buyer states that they must sell their home before they can finalize the purchase of yours. There has to be a realistic time limit, so the buyer doesn't tie up your listing.

 

It's wise to respond with a "kick-out" clause that allows you to keep your home on the market while the buyers try to find a buyer for their home, offering them a 24 hour period to release their contingency if you decide to accept an offer from another buyer.

 

These two examples are just the tip of the iceberg, so sit and discuss each contingency with your agent before making your decision when your receive your Offer To Purchase.