Posted by IB (NJ) on March 20, 2008 at 05:45:36:
Sure you can put that in the contract. I would even put that the deal was contingent on the successful sale of the other property at a specific price. As long as all parties agree and the clause in the agreement is not illegal. To be sure, consult an attorney.
Selling Two Properties and Need Advice - Posted by BC
Posted by BC on March 20, 2008 at 05:12:47:
I’m selling two of my investment properties that happen to be side-by-side and the parties that are buying these properties are related. These will be on separate contracts as daughter is buying one property and father/mother is buying the other. I gave them a ‘package’ price for both properties (I lowered the price in order to sell both of them) and my concern is that one of the parties might backout of the deal and then they end up getting one of the properties for cheap because of the package deal I gave them. We can’t put all parties on each contract because they’re getting separate mortgage loans.
Has anyone ever done an addendum to a contract that stipulates that the sale of one property is contingent upon the successful sale of the other? I know people do it all the time with putting offers in to buy a home contingent upon selling their existing home, but I’ve never seen an addendum with contingencies of another party executing a contract of sale.
Really looking for some sort of verbage to put on the addendum.
Would appreciate any insight.
Re: Selling Two Properties and Need Advice - Posted by Kurto
Posted by Kurto on March 20, 2008 at 18:38:15:
You can put pretty much anything in a contract. Getting everyone to agree may be a different story. The problem you face is you practically have to have a simultaneous close to ensure the other party fulfills.
Depending on how much of a discount you gave it may not be worth worrying too much about it if one party does not fulfill. The extra cost of holding and remarketing both properties again may end up being more of an expense.
I would probably just get as much of an earnest money deposit from both parties as you can and make it non-refundable if the property does not close. This should help offset the discount given.
Bottom line for me would be one bird in the hand is better than 2 in the bush. Your first buyer is usually your best buyer and to squabble over a few thousand dollars (assuming this is the amount we are talking about) which can result in a lost sale usually will hurt less now than what you will lose by continually holding on to the property and potentially taking less anyway down the road.