Posted by Chris - Fl on July 29, 2001 at 18:28:29:
Drew,
Can you tell more about this Wells Fargo program?
Thanks,
Chris
Counter offer question - Posted by GMan
Posted by GMan on July 28, 2001 at 11:47:43:
My wife and I put in an offer of $136k for a house listed at $137.9k and they countered with 137k for the price. Our only contingencies were financing and inspection. A contingency of the counter has raised a flag with us. It says " The Buyers are notified that the Sellers will continue to actively market the home for sale until the Buyers remove all contingencies to their offer. In the event the Sellers accept a secondary Offer, the Buyer shall be given written notice to remove all Offer contingencies within 72 hours or, upon written notice from the Sellers to the Buyers, this offer will be declared null and void and all earnest money will be returned to the Buyers". Is this fair/legal to do with an accepted offer? We would be spending $$$ to do an inspection on a house that could be sold out from under us. They want us to remove inspection as a contingency? Doesn’t seem fair. Any help would be appreciated
Re: Counter offer question - Posted by dewCO
Posted by dewCO on July 28, 2001 at 15:43:34:
Theoretically everything is negotiable. I’ve used that language before, however, it’s usually used, in my experience, when you also have to sell a home to in order to close.
You may also be in a very hot market–or the sellers think a lot of their house.
I wouldn’t be as much worried about the inspection contingency as the financing one. You can probably get the inspection done quickly and decide if you want to remove that one. However, unless you’re paying cash, the financing one may be a little trickier unless you are 100% sure you’ve got your loan nailed down, by a reputable company. Hope you aren’t having to sell a house too, although I have found a great program through Wells Fargo that eliminates that problem for buyers who need to sell too. Good Luck.
Re: Counter offer question - Posted by Jim FL
Posted by Jim FL on July 28, 2001 at 13:59:53:
Gman,
As was said below, this is common in many areas, and known as a “kick out clause”.
I just used one myself on my personal residence in Illinois.
As a seller, this seems to be a good idea to use one.
and for you, there is also good news.
Even though the home will remain listed, it will say in the MLS listing that an offer has been accepted, but with some contingency in place.(contract pending, or some such thing.)
This means the home will not get as many showings if any at all. Agents want to show homes to there clients that they can close on for sure, and make money.
I personally did this because I just could not pull my home completely off the market for a month, and wait to see IF my buyer got their loan.
Thankfully they did and we closed. I also insisted on the inspection taking place within a certain time frame.
My advice, get an inspection done FAST, and get your financing in place.
Then set a closing date as soon as you can.
This is of course assuming you really want the house badly.
Although, I have to be honest with you, if the home is listed at $137,9k, then why are you willing to pay darn near the full value? (or was it listed for under value to begin with?)
Are you getting good terms?
And lastly, why are you getting a loan to buy a house?
Here, most of us that buy houses all the time know the Golden rule, which is “make your money when you buy.”
Are you doing that?
And, if you do not get this house, and someone else does, so what!
There are others out there, and you should be able to beat the deal you have here.
Good luck,
Jim FL
Re: Counter offer question - Posted by Dave T
Posted by Dave T on July 28, 2001 at 12:58:38:
Yes, this is fair and legitimate.
In the jargon of the business, this is called a “kick-out clause”. I have used it myself when the buyers purchase offer has included a financing contingency, or a home sale contingency.
The purpose of this kick-out clause is to allow the seller to continue to market the property, and to take backup offers until the buyer’s contingency is removed. In the event that a backup offer does not have the same contingency as the primary offer, then the first buyer is given a reasonable amount of time to remove the contingency or else the seller will cancel the contract and accept the second offer.
What if the seller takes the property off the market, but the buyer later says that he must exercise his contingency to cancel the contract. If the seller has a kick-out clause, then the property was never really taken off the market.
Re: Counter offer question - Posted by Tom – IN
Posted by Tom – IN on July 28, 2001 at 11:53:42:
You don’t have to accept their counter, or their conditions.