There are reasons why contingent offers can sometimes be less appealing than offers which may not be as much money. A contingent offer comes with a whole new set of 'outs' for the buyer, and potential headaches for the seller. As I mentioned previously, moving the closing date can come at a cost, so having the sale of a house tied to the sale of another can cause issues.
The Domino Effect isn't some new theory. Everyone knows it. I had a situation in late 2016 where the domino effect came into play, and it wasn't good. My clients were selling a home and purchasing an inventory new construction home. Closing dates were set. This is where it gets hairy, so pay attention. The buyer of my clients home also had a house to sell. Their home was under contract, set to close the same day as the ones my clients had. The buyer of their home could not make the closing date work due to a financing issue and, per the CFPB 3 Day CD laws, we were unable to make our original closing date. Well, this created more issues than you may think.
Not only did it bump closing back six days, meaning my clients lost six days worth of taxes, mortgage interest, and HOA dues, the builder was also imposing a $125/day fine for each day we couldn't close after the original closing date. This fine had to be paid at closing, or the builder would not sign the closing documents. Not cool.
So my sellers were the only ones being penalized for a screw up be someone indirectly involved with the sale of their home was unable to meet their obligation. Everyone else got away scot free except my clients, and there wasn't anything we could do about it.
The Domino Effect: it's real, and it can be costly if it's not nipped in the bud ahead of time.
So if you're in the market to buy or sell a home, Contact Me Today!
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