Handling conditional offers when you are selling for sale by owner might seem like a daunting task.
Let's set the scene. "I am going to sell my house privately" you have announced to everyone. Everything so far has gone smooth.
A buyer that viewed your house last evening is now sitting at the kitchen table with you, contract in hand.
By the way, if you are looking for a good source to find for sale by owner real estate contract forms, may I suggest you check out the following: For Sale by Owner House Real Estate Contracts
Great! You look over everything carefully and it all looks fine. The price is right, closing date good, the subject to lawyer review clause is inserted. Looking good to sell!
Then you see the extra attached form with the clause concerning the Subject to the Sale of the Purchaser's Property.
promised you that I would try to cover everything that could occur in a for sale by owner situation and this, is just another example which will cover handling conditional offers.
To access more information about contracts, offers and clauses just select any of the thumbnail photo links below.
The good news? ABSOLUTELY!
I personally believe, you actually have an advantage accepting an SPP when you are faced with handling conditional offers.
Here is why. First, keep in mind that this is based on my experience when I was a real estate agent, so there is a chance that in your area, the rules may be different, or the rules may have changed.
When a real estate agent receives an SPP, they are required to report that offer to the real estate board, when they are a member of said board.
You on the other hand as a for sale by owner, do not. Follow? OK, in case you don't catch the significance of this, let me try to explain.
Do as I Say, Not as I Do
Once the real estate agent has reported the SPP to the MLS® board, within a short period of time that information is transmitted to all the board members.
All the real estate agents now know there is an SPP contract on the property.
In a perfect world, that should mean absolutely nothing. Why? All the agents should continue to show the property in question until perhaps one of their buyers puts in an offer.
At that time, if accepted, they wait for the condition to be released, or the first buyer makes their contract firm and binding.
Now, I said a perfect world. My experience? Don't happen that way. Here is what usually happens.
The problem is, they are breaking the real estate rules. This type of tactic then becomes unfair to the real estate agents that show the house, without knowing there is a conditional contract in place.
You, by selling your house for sale by owner, have absolutely no obligation to tell anyone, that you have a conditional contract in place until they actually bring you their contract. In fact, may I suggest you just keep quiet about the SPP.
When a purchaser puts in a SPP bid, unless they receive an UNCONDITIONAL offer on their property, they will probably have to release the property to the 2nd buyer that doesn't have a house to sell.
If the 2nd bid is also a SPP offer, you can accept that offer as well, subject to the release of the first SPP.
If the 2nd SPP bid receives an unconditional offer on their house first, they can lift their condition subject to the first buyer releasing their contract.
Clear as Mud?
The SPP Clause
I will not write out an actual SPP clause that you might use when handling conditional offers.
I suggest you obtain the proper forms or clauses from one of the sources I listed at Where do You Acquire these Forms
I will suggest it should cover the following:
This is just a rough outline of this handling conditional offers page, should you decide to write the clause yourself.
Does the 2nd Offer have to be Better?
Short answer: No.
Just be Careful
Make sure that you include a subject to lawyer approval clause (link below for wording) and have your real estate lawyer review the contract in the time frame stated in the clause.
Just to refresh you go to; Subject to Lawyer Approval Clause
Just ALWAYS include that clause when you sell for sale by owner you just read on the other page, OK?
If you secure the services of a residential real estate lawyer, when you sell for sale by owner and have him or her go over the contract with you, there should be no reason for concern.
For More Information about Offers and Clauses
Just select one of these thumbnail photo links