What are the legal issues involved in someone purchasing our home pending the sale of his?
kristipellegrin asked:
We are selling our home “by owner”, and someone has just propositioned us to sell our home to them pending the sale of theirs. What legal issues are involved with this? How can we agree to this without hurting ourselves in the process if their home is not sold in a reasonable time span?
We are selling our home “by owner”, and someone has just propositioned us to sell our home to them pending the sale of theirs. What legal issues are involved with this? How can we agree to this without hurting ourselves in the process if their home is not sold in a reasonable time span?
Hire a lawyer. It is always to be safe then sorry.
You just have to stipulate a time frame in the sales agreement. If it goes beyond that then you have the right to withdrawl from the deal.
You’re taking the risk. If their home doesn’t sell and the purchase contract was contingent on their home selling, they can walk away from the contract. How about you give them the option to purchase your home for three to six months and charge them an option fee to cover your loss in case they don’t sell. For example, you agree to sell the home for 100k. Write up a purchase option contract where the buyers have an option to purchase your home for 90k within the next 3 months. You then charge them a non-refundable 10k option fee to make the option contract legal.
That way, if they don’t sell their house, you still have money to pay your mortgage/expenses and their contract simply expires and you can find new buyers.
Regards
This is common in home sales, particularly in slow markets. It’s essentially a contingent offer–the buyer agrees to buy your house on the contingency that his is sold first. If you do this, you’ll want to be sure that the contract has some clearly defined items to protect you:
- You should put a clause in that says if the buyer does not sell their house within some number of days, the offer is considered rescinded and you can sell the house to someone else.
- You should also have a clause that says the offer price from the buyer is -not- contingent upon his home sale. i.e. They can’t come back and try to reduce their offer price because they sold their house for less than expected.
- You should require any extensions to be explicit–meaning that the buyer has to ask for additional days on his contingent offer and get your approval for it to be valid. This could be important in a scenario such as if you say that you agree not to sell your house to anyone else for 45 days, but then on day 44 he sells his house and does not notify you. He might then come to you on day 46 and expect you to sell it to him and you may have already started proceedings with your second offer.
- You should also stipulate that during the contingency period, you retain the right to show the house to other potential buyers for the purposes of obtaining second and third offers.
You should really consult a real estate lawyer or a real estate agent for a transaction like this. The amount that they will cost you could be very small compared to a potential lawsuit down the road over a poorly written contract or your inexperience in dealing with large-value transactions.
If their house is under contract, then it is just a matter of their buyers making it to closing.
If their house is just on the market and is not under contract, then I wouldn’t accept the offer if I was you. I would keep your house on the market and tell them to make an offer when they have a contract.
.Hire a Realtor to help eliminate law suits
We’re going through this very thing right now. The only difference is that we are using a Real Estate Agent to sell our home and the home we want is being purchased via the owner. Here’s what we did…. The owner of the home we want to buy had a contract drawn-up that states we have until a certain date to sell our home. In other words, he’ll hold the home for us until then. But when that date arrives and (if) we still have not sold our home, everything is null and void. The contract was signed by both parties and is legal as a lawyer did create the agreement. Hope this helps.
Need to SELL (possibly IN 7 DAYS) YOUR HOME ?
Required Info- Homeowners name, property address (including City, State, and Zip), phone # to be reached at, months & money behind if any.
Email info to -