When a Buyer and Seller agree to the terms of sale on a property, Sellers and Agents alike usually let out a sigh of relief. Unfortunately, the signing of a purchase offer is usually a little early for celebration if the offer contains contingencies. What’s a Contingency? A contingency gives the Buyer the opportunity to reconsider or withdraw the purchase offer if a certain condition is not satisfied. Property Inspections, Financing, Surveys, Appraisals, the sale of another property, Adirondack Park Agency approval of a project – these are all common contingencies. When an offer has been accepted the property is referred to as being “Under Contract” or “Pending”, this status is often followed by “with Contingency”. Until the contingencies have been removed, the Seller’s agent should continue to arrange showings and encourage back up offers. This is even more important in the Old Forge real estate market, because our sales may be seasonal in nature. Financing contingencies are the most common. Obtaining financing for Adirondack properties may be challenging due to several factors unique to our market. These may include seasonal property access, non-winterized buildings and difficulty finding comparable recent sales for appraisals. Buyers will often opt out of looking at a property that is “Under Contract” or “Pending” even when they understand that there are multiple contingencies in place. It is understandable that a Buyer may regard viewing a property that has received an offer as being an exercise in futility. This is not necessarily the case.
There have been a few occasions when I have called a Listing Office to schedule a showing and received a response of “No, I’m sorry you can’t show that property because we are receiving (or have received) a purchase offer.” Procuring multiple offers is always in the best interest of the Seller. In fact, the Listing Agent should contact parties that have expressed a sincere interest in the property and let them know that it may be their last chance to make an offer. Unfortunately, not every agent will do this. At this very moment they should ask themselves “Who do I represent?” When a Seller’s agent discourages a second or backup offer they are not fulfilling their obligation to the Seller. The Seller’s best interest should be their top priority! As a Seller, there is absolutely no harm in asking if other Buyers have been given the opportunity to submit an offer before signing. Make sure you understand the contingencies and the impact they have on the possible sale. Keep in mind you will want the contract to clearly define a deadline for when the contingencies will need to be resolved. It is important to remember that it is not uncommon for the Buyer prospect in the second or third position to ultimately become the property’s new owner.