VOL. 41 | NO. 1 | Friday, January 06, 2017
Slowdown in market brings sanity back to closing issues
As the market slows, the sale-of-home contingency has escaped extinction.
In the real estate environment that Nashville has experienced over the past five years, one of the major issues facing sellers was how to schedule the move when the house sold.
No one puts a house on the market in hopes of selling fast, putting their belongings in storage, trying to find decent short-term rental housing, making a hurried purchase of a new house and moving into it some 60 to 90 days after moving out of their existing home.
For up until now, once a house was listed, it sold and the buyers wanted to move in – NOW!
Now listings are aging, and offers that are contingent on the buyers selling their current residence are floating into sellers for review. With the market aflutter, these offers were shunned as there were always offers from the newcomers swarming in the relocation herds.
The question that sellers should consider when receiving an offer containing a sale-of-home contingency is whether the home of the buyer is more sellable than the owner’s current residence.
Some things to consider would be area – location, location, location – and price, as overpriced houses are resting these days. Additionally, are there any stigmatizing elements with the other property such as power lines, bad school zones, traffic, design or railroad tracks.
In many cases, the buyer’s house is more desirable than the listing they are offering to purchase, and the sale of home contingency is an upgrade. In that case, the seller should consider accepting the offer and hoping for the best.
One downside is that – at the point of entering into a contract – the seller must flag the house as under contract in MLS, and many brokers will not show houses that are under contract for most have a “kickout clause” or a right of first refusal meaning. That means the seller may continue to market the home, and if the seller receives an acceptable offer, the buyer with the sale-of-home contingency has a certain period of time – usually 48 hours – in which to remove the sale of home contingency or risk losing the house.
This is often confusing to the buyers with the house under contract, the buyers who are also sellers and they have prepared their homes for sale and are excited about moving.
When the seller of the original listing gets an offer and accepts it, the buyer with the home for sale has 48 hours to try to rustle up enough cash to buy the other and risk carrying two mortgages for several months.
After the seller allows the house to go to the new buyer, that person may read later that the house sold for $15,000 less than their contract.
They thought the offer had to be better than theirs in order to put them on notice. In fact, the offer merely has to be acceptable.
Sale of the Week
As 2016 faded into the universe, another million-dollar sale hit the books when Melanie Baker, the perennial million-dollar broker, sold her listing at 4512 Price Circle Road in Hillwood Estate.
Price Circle Road is a quiet, unassuming street, and this 8,239-square-foot home sold for $1,725,000 only three years after selling for $1,335,000.
Baker, who hails from Zeitlin and Company, Realtors, described her listing as a “spectacular home nestled on a private 1.37-acre lot with stunning new pool design, chic outdoor porch, luxurious master suite, gourmet kitchen and all suite bedrooms.” She also noted there are views of downtown in the winter.
Here is the kicker: the house has 10 full baths. Not a misprint by me or by Baker. There are five full baths on the first floor, four on the second floor, and one in the lower level.
There are only seven bedrooms. While only is not a word often used to describe seven bedrooms, it is significant in this house as the first floor has two bedrooms utilizing five full bathrooms.
The master suite is on the first floor, and the house features a central vacuum system, a guest house and in-law quarters. There are a couple of sets of washers and dryers. Scott Potter and his crew at Metro Water wish there were more houses like this one.
Suzanne Elmer, known in some circles as the Ringo Starr of real estate, more for her drumming than her jewelry, represented the seller.
In addition to her percussion skills, Elmer can keep a beat in the kitchen as a gourmet chef and was, therefore, able to provide expert commentary on the kitchen.
Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at Richard@richarcourtney.com.