In the land of contingencies...the one that happens less often may be, "Contingent upon touring the seller's home."
Most of mybuyer clients usually step foot on the property beforewriting an offer. The most common contingencies ones are...
- Contingency to sell your home before you close on another.
- Contingent upon buyer obtaining proper financing.
- Contingent upon seller to pay X amount toward buyer's closing costs.
- Contingent upon a satisfactory home inspection.
- Contingent upon the house appraising at purchase price or higher.
Yada, Yada, Yada.......
Many of my buyers are from out of state and make plans in the near future to come check out the listings I have sent them.
This all takes a considerable amount of researching both the buyers and the listings to find the perfect home.
Usually, they are very excited about visiting our beautiful state.
Local buyers get in the car and get over there fast to check out the property so they can be the first ones to get an offer in.
I have still had to present offers in a multiple offer situation this year.
I have one client that closed and moved into a house sight unseen.
Only pictures and a few phone calls after I toured the home sufficed for them to write an offer.
Nice properties priced right don't stick around.
I do know of an agent that wrote an offer for his client"Contingent upon touring the seller's home". It was newly listed and he knew that numerous agents had called the listing agent to make appointments to view the house that day.
His offer was accepted and his client got the house. The other agents didn't have much of a chance. Many of their clients were not prepared to write an offer on the spot without more research.
Many times I have to try to find a replacement house after the out of town buyers get here and the home they were fixated on the Internet so long is already under contract. I'd love to write an offer for them"contingent upon touring the seller's home" if I know it is perfect house for them and they will be here soon.
Hey....did I just wake from a dream? I thought I had found just the perfect house for you...
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Lizette ~ I have written that contingency on a couple of occasions. It's always interesting when the Buyer arrives, sees the house, and doesn't like it. It happens!
They always look better in pictures on the Internet. One agent laughed on the phone when he told me that he personally wouldn't buy his listing. He had hired a professional photographer to make it look like a million dollars. I bet the sellers wouldn't have appreciated his chat with me. I took it off my "To tour list".
Hi Lizette ~ Now that's an interesting contingency - Very creative approach from this agent.
I've written a couple of offers for out of town buyers who obviously weren't in a position to view the home, but it wasn't at all the same - There were no competing buyers, it was just a logistical decision.
I'll have to keep this idea in mind for when I do run into the competing buyer scenario.
Denise
I am sure that too many contingencies end up being an unmentionable in the punch bowl.
I had to double-check to see where you were located. We have a similar market. Most people think our buyers are nuts. But it's very common around here.
BTW, I love this picture. That splash of vibrant color in the flowers is beautiful =)
Featured @ Club Chaos
I've seen this before and nothing makes me more nervous than when it's been my buyer. On two occasions I have actually closed homes where the buyers have only seen the pictures! WOW
Lizette, I think it's phenominal that someone bought a home, sight unseen....based on pictures and all the information you could provide. That's trust....and a wonderful relationship between people working together.
We have done this several times. A friend of mine in Ann Arbor has invented a live tour computer, which I will be sharing about in a few weeks. You walk through the house with the camera, and it live streams on their computer. They can say show me that fixture etc...
I have sold home by using my flip but this new technology will be much better because you can dialog with them while walking through the house.
I have seen this type of contingency before, but not for many years since the days of the "booming market" locally.
My husband had to be dragged to our new home...for the inspection. It was the first time he had seen it. Some people just don't worry about such things.
It would make me crazy...and sick.
Missy, that sounds interesting. I let a client look at a home through Skype once. I carried arround my laptop and they looked at everything.
Monica, I'm with you on that!
Carolyn, Thanks for the feature!
Lizette...how about contingency on how the stars align or if I see angels in the house! You're right about the pricing of homes...The accurate price sells the home, of course, if it's ready to sell...Cherise
Hey Lizette,
How about contingent on how good smells the home? :) hahaha I'm the kind of person that if a home smells good there is more to see, but if the home stinks I really don't want to show it to my clients, I mean they can see whatever they want and do whatever they choose to, but it's up to them to keep looking a house that it's stiny unless it is for investment / fixer upper.
Lizette - I've only had to use this type of contingency a few times and it can work.
Lizette - I have used this one before, but it's been at least 5 years since I did. It never ceases to make me nervous, though. :)
That would be a fun offer to write up...wouldn't you like to see the shocked expression on the seller's face when they read it? :-)
Hi Lizette -- When I lived in the Washington, D.C. area, it was a strong seller's market at one point and some buyers were showing up with home inspectors at the open house and writing offers on the spot -- not all homes, but some. I bought my first home almost that way.
I certainly wouldn't want the responsibility that comes along with this contingency.
I've done this lately for out of town clients on several homes as we're likely to have multiple offers on certain homes these days.
I once bought some property sight unseen. I put it into contract knowing I would be visiting the property within a week. I don't remember what contingency we put into the contract. Needless to say when I got there the property was stunning, the views unbelievable. Hands down I went for it. Still own it today.
We have had this happen a lot -- a lot of people get info from us and are out of the area -- and will offer before they have seen the home.
Hey, Lizette - How ya doing?
regarding contingencies on buying a home - so many possibilities.
I have sold several homes sight unseen, but the buyers had been to town and viewed and decided on certain neighborhoods and floorplans - sometimes they have to go home and sell their house.
Once they are ready -they know the neighborhood, know the floorplan, I am good to go - I lurk, waiting for the right house to come on the market, contract already written on my computer, rush over and take pics, good and bad, flip video the neighborhood and send the offer with the price and address filled in.
But it makes me nervous till they get here. Always.
Good post.
I had one of these a few years back where the buyer didn't see the property until we were going to closing. Made me a nervous wreck! I must have sent a thousand pictures to be sure this is what he wanted to do and sent many reasons as to why I thought he should stop by and visit first! We closed and all went well, but, WHEW!
Robin just one last month and will be meeting the new owners at the property in the very near future.
Sue of Robin and Sue
Oh, PS: I agree that's a great picture and the flowers just pop!
Sue of Robin and Sue
We run into quite a few homes in the area that can't be accessed for showings. Ran across one just today where the listing agent suggested we write subject to a visual inspection by the buyer(s).
Lizette, it probably sounds weird but there are some understandable reasons for it.
I'm constantly saying that every market is different. "Contingent upon showing" is pretty common here in Las Vegas. You can preview couple of dozens homes, put several full price cash offers and get none of them accepted!
Contingencies upon touring the property or showing happen in my practice in two different situations: 1. Out of town, out of state or out of country buyers. 2. Investors, who don't have time for checking the properties. They just put multiple offers and in case if an offer on a house is accepted they will go to see the house.
Many times it happens that my clients investors put offers without such a contingency and without showing. And these are usually the best deals :)
I had a well-priced listing sell to a local real estate broker and investor who put an offer in my hands within minutes of my listing appearing in the MLS... before the flood of other agents started calling for appointments. And I've sold two homes without the out-of-town buyer first seeing them. It does happen but it's certainly not the norm.
Is that a photo of the house which sold without seeing it? With google earth for viewing the neighborhood and some familiarity with the area, this photo would certainly capture my attention. It's beautiful!
Hi Lizette,
I do this quite often because decent foreclosure homes do not stay on the market, and sometimes buyers aren't available to view-out of state, country, whatever. It is a little nerve wracking but then again, nothing is written in stone these days.
P.S. Love your hair!
Hello Lizette,
Great post. This type of contingency is becoming more and more important with all of the things going on in the market. I utilize this tool all of the time and I have had really good success with it. Here is how I handle it: If we have a 5 day "contingent upon viewing", we Make the deposit go into escrow in 5 days. This makes it very clean and easy...Of course the seller has to agree, but they will in many cases. I really prefer to keep the deposit out of escrow until we know we have a deal.
Clayton
Lizette:
I am working with a number of relocation buyers and I shoot videos of all of the homes they are interested in. It has been an effective way for them to eliminate potential properties. No one has actually purchased through the videos only but I know that is coming.
This is interesting. I may need to use this for some buyers I have so that we can get things moving much more quickly for them - both are out of state and have to take long trips here to preview properties...it would be much more convenient to write an offer the way you described...
Lizette,
In a hot market that's a good way to get the property before anyone else. I assume that the seller's gave them a short period and had an escape clause.
Brian
I do lots of investor business from out of state or out of country people. I would say that at least 70% have never seen the house. It would be a rare occasion that someone who is going to live there would trust me or anyone enough to write a blind offer and just move in without seeing it. I would have to say that if I did get an offer with a contingency to view, it would be a very short time frame, like 5 days or less.
Ray, I do like the idea of the house smelling good. I do know of a few I walked into and I walked right back out because of smelling bad. How do people live there?
Margaret, this photo is one I took of a historic home(4 sale again now) that the buyers did make an offer on after they viewed it online from AZ. They bought this one and later bought another sight unseen after I sent them pictures.
Clayton, I do like your idea for the escrow money. I wonder if we can do that here in KY? Our rules are that as soon as the contract is signed and dated we have 3 days to deposit the earnest money in the escrow account.
It's a contact managment system that pays for itself. I like that even better!
I have been getting some fabulous deals since starting this idea. One was a sale of a house over 1M.(we close March 9) Today, I am going on a listing interview after they received one of my cards.
Email me and I can tell you more on how to use this too.
Lizette, this is fairly common for the high end homes that I draw for. Houston has a large population of upper level executives (oil industry), and doctors (medical center) transferring in and out of the city. Since the plans I draw are so detailed and have embedded photos, the homes are often "toured" online, and its not uncommon for a purchase decision to be made at that point. For many of these buyers .. they've lived in Houston before, they know the neighborhoods they want to live in and are technically comfortable to touring online. We also have Har.com, our public accessible MLS that is just fabulous... easily accessible to consumers 24/7 no matter what corner of the world they are in.
I saw this happen quite often back in the days of 2005-2006...not so much now.
As a listing agent I would ask them to remove the contingency for further review or as a Buyer's agent I would not want that contingency to dilute a good offer.
I haven't used this tactic. It's a great idea! I've written a few offers sight unseen for out of state buyers. I take my video cam and that really helps them make a decision.
Buying a home sight unseen is very ---shall I say fun! My wife and I bought a home back in 03 that way. I was out to our new area a few weeks earlier and we wrote three offers-- all went belly up. I saw this home at the time but it was out of our price range. My agent called and let me know it dropped in price...what to do, I liked the outside but never saw the inside. My folks went were there on a vacation a week later. They went to the house with the agent and took pics. I asked my father one question. If you were 32 would you buy this house. We signed contracts later that day via fax. Besides, if it is a solid home and passes home inspection with flying colors you will always be able to resell if needed...but we loved it.
Lizette, I have done two offers of this kind on beachfront condominiums and both my buyers got the property. It's fun when it works! They came in a matter of days to view the property and both were cash sales.
I've had this come up once. It was a duplex. The occupants were both tennants who wanted to stay and one was a day sleeper. The owner did not want to upset the tennants by tramping people through the units. They didn't even put a sign in the yard because they didn't want the tennants to scare off.
Naturally, my buyer wanted to look inside the units but they insisted that we had to have an offer in hand first, to prove we were serious and not just compairing.
So we decided we would go ahead and write an offer contingent upon viewing the interior of each unit. We were going to take it a step futher and actually write in that the offer price was also contingent upon it and subject to change after the viewing. Funny enough, once we told the agent of our intent to write the offer so we could schedule the showing, THEN they were more than willing to let us go out in that same day.
The buyer liked it. We wrote the offer without that contingency, and the seller accepted.
Last year I wrote 30 offers for a buyer site unseen. The problem was, they were all short sale homes in the San Fernando Valley. After a few months, I started to get some calls from the listing agent once the short sale was approved.
In some situations it does work to write offers but generally speaking, I believe the client must view the home first.
I'm sure we are going to see more and more creative ideas as the market evolves.
This is very common when the property is multi-family. Owner does not want to disturb tenants multiple times. If the offers are contingent upon interior inspection tenants are disturbed only once (hopefully). Also works well for rental houses.
I have done it in the past myself, but for an investor once we knew the numbers worked. He wasn't going to live there.
This is quite ironic that I should be reading this post because before noon today, I submitted an offer for a buyer who had not yet viewed the house. The pictures were great which was the 1st draw and then the drive-by. By the end of the day, the listing agent and I were in discussion (not negotiating) about the house and my buyer and I will tour the home tomorrow. It won't be the first time that I've submitted an offer this way and, if accepted, it won't be a first either (by this method).
Lizette- We use this a lot. We get so many international buyers here. One out of every four Florida buyers is an international buyer. We also sell alot to folks up north that will trust our buyers agents to find them second homes and vacation homes sight unseen. We have even sold these homes without the seller ever even seeing the property. Mostly ocean front condos and the like- where it is all basically the same look and feel. And at times they have been here and toured then go back and then call back and give their criteria and then buy sight unseen although they know what they want. My best friend sold a 3 M $ horse ranch listing to a man in Egypt all over the internet. HE never saw the place in person and he paid all cash for the ranch. Then he came here and tore it all down, the interior, and rebuilt it all to his liking. Katerina
Lizette - This is not a common practice in our area at this time. However, a smart buyer combined with a diligent agent will be ready to implement this strategy if needed. I like your photo also and am curious about the contact management system you use with your greeting card system. Do tell us more.
This is the way of the future, in this borderless world of the internet search, where time and geography have been erased. Thanks for the timely alert!
I've picked up a client who lives out of the country. This may be the way to go with them. Thanks for the tip.
I am doing this all the time now, so many short sales and tenent occupied homes require an accepted offer prior to touring the home. So we write it "subject to inspection"