Are you finding yourself in one of these situations? Your property is on the market and you are: 1) hopeful that you will soon have an offer, 2) have an accepted offer and are working towards an executed contract, or, 3) have a signed contract and are working through contingencies or waiting to close. In the meantime, you are out looking for properties and you find just what you have been looking for. Recently, I worked with buyers who were exactly in this situation.
In this current market, the price point of my buyers hovered around the overall average sale price in Greenwich, meaning lots of buyers in this segment. The property that they settled on was in a terrific location and the home was nicely built, with a logical floor plan and great outdoor space. The bid that we presented reflected our understanding of the appeal of the property and the desirability that we knew it would have. Our conditions were clean– 20 day mortgage contingency (typical contingencies can be up to 45 days, but because of the pre-approval that my buyers had received and their strong relationship with the bank, the bank put the mortgage application on high priority), building inspection, 60 days to closing and the presence of a Hubbard clause. The Hubbard clause basically states that if my buyers’ buyer does not get to a contingent free contract, they can exit the contract on their Greenwich property. As you might expect, sellers do not like Hubbard clauses. Rather than give up, we took a different tack:
- Stayed in close communication with the Seller: We were up-front about the situation, the timing of our buyer’s approval process, and provided as much as we felt comfortable with, about the building and the contract status to give the Seller of the Greenwich property information that would increase their comfort level,
- Looked for alternative solutions to reduce risk: These included proposing: 1) a rent-to-buy option with a 5 month out closing date, giving my buyers adequate time to find another buyer, should the one in hand not pass board approval, 2) going to contract and allowing the seller to continue to show the property with a right of first refusal for my clients, should another offer come in, and, 3) have a gifting or loan from a family member in the wings, and available to use on a short term basis to cover the 20% down payment, should the co-op not sell prior to when the Greenwich property sold.
- Stayed organized, positive and as accommodating as we could, within the confines of the Hubbard situation.
Real estate might be about an asset, but when it is being traded the human component plays a huge role. Being solutions-based and collaborative, are tools that are available and valuable.