Contingency for Sale of Buyers Property/First Right of Refusal

5 04 2011

Let’s say you have a home you have to sell prior to being able to purchase another property.  Maybe you already have it listed, and maybe you’re not ready until you find something that motivates you to move…either way, you’d be able to make an offer that had one additional contingency to the “normal” list – a contingency for the sale of the buyers property.

Everything would still be negotiated in the normal fashion, just as if you didn’t have to sell a property first…with the exception of the contingency for the sale of a buyers property.  In the case of the state of Montana, if your offer is accepted in the fashion, the property you are planning to buy would still remain active on the market & available for others to come and view it/make offers.   The difference is you’d have a First Right of Refusal.  There would be private remarks in the MLS to signify to other buyers agents that there is a first right of refusal on that property you’re trying to buy.  If the other buyers want to view it anyway, they have that right.  They also have the right to make an offer.  This has virtually NOTHING to do with your offer.  It does NOT have to be more/better…it just has to be accepted by the seller.  Once the offer is accepted, the sellers agent will notify your buyers agent.  Once notification is complete (usually a phone call), the predetermined set time starts ticking.  Most commonly in Billings, 48 hours is what to expect.  This means you’ll have 48 hours to remove your contingency & continue forward with the purchase.  If you unable/unwilling to remove that contingency, you’ll have your earnest money returned to you & you’ll have no buy/sell in place anymore.  If you do choose to drop the contingency (maybe an offer came in just in the nick of time….or you really could qualify for two properties, but didn’t want to unless forced…or someone decides to co-sign with you), you’ll also have to waive your financing contingency & come up with extra money.  Expect to have to add an additional $1,000 or more to your current earnest money check.  Without the financing contingency, if something goes wrong & the bank won’t end up lending you the money, you’ll lose your earnest money & the property.

Super basic breakdown

1.  You view & like & make accepted offer with contingency/first right of refusal (because you have to sell something first to be able to buy)

2.  You have your property on market & other property stays active, but with a first first of refusal to you.

3.  Other people come look at the one you are hoping to buy & maybe make an offer

4.  Regardless of price/terms/conditions of the buy/sell (yours or theirs), you’ll have a set time to remove your contingency for the sale of your property & move forward with the purchase anyway OR you get your earnest money returned to you & the property gets purchased by someone else.

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