I was visiting a real estate forum yesterday, and the questions asked are always an interesting bunch, especially when they come from uneducated real estate agents. There is this new agent who posed this question to an online forum instead of reaching out to his broker for the education. Bright RED flags are waving right there!
The scenario: This agent has a buyer who has a contract on a property to purchase. This purchase is contingent upon the buyers' current house closing. The agent asked when he should remove the contingency as the listing agent told him he needed to.
The short answer? AT CLOSING!!
Buyers and Sellers, please PLEASE make sure your agents know how real estate works as you don't want to be the guinea pig for their brand new real estate career, especially if they're too scared to approach their broker for help.
Let's review this situation. When you are selling your house and you want to buy a new one, the only way to protect yourself from two mortgages is to put your new purchase contingent upon the first property closing (even if you don't have a mortgage, you might not want the responsibilities of two properties). If you waive your contingency for any reason, and the buyer on your current property doesn't close and fund, you don't have a way out of not closing on the second property without breaching the contract and going into default.
This new agent thought that since the inspection was completed on the property, that it meant the buyers were moving forward and the contingency should be removed, afterall, that's what the listing agent told him. Shame on the listing agent to take advantage, though in his mind, he was probably just trying to protect his sellers. All seasoned agents know that things can go wrong right up until the last minute, you just never know.
If your agent is encouraging you to waive your contingency, and you aren't comfortable with that, you need to have a conversation with you agent to make sure you're all on the same page. Granted, if you can afford both properties and the seller has received another contract and has asked you to waive your contingency or else they "kick out" your contract, it's all about your comfort zone and whether or not you want that. You need to know what would happen if you had to put your house back on the market.
To sum up, arm yourself with education. Don't let your agent (or the other agent) bully you. But also know that your agent giving you all the worse-case scenarios doesn't make them a bully, but they're trying to make sure you know all the negatives of what could happen. If you can sleep at night, that's all that matters, right?!
**Are You Packed Yet?**
Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, CedarPark, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way.
For real time Austin TX listings,click here.
** Multi-Million Dollar Producer Year after Year **
** Platinum Top 50 Finalist 2011 out of almost 9000 agents in Austin TX**
** Five-Star Professional 2011 & 2012 **
** RE/MAX 100% Club **
Copyright© 2012 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* When Do You Remove a Purchase Contingency? * was first published on donnahomesblog.com.