This is What Would You Do: The Contingency Dilemma Part 2. Did you leave your take on how you would handle this situation? Great, as usual before I share with you what happened I will recap the problem.
Recap
We have a person that is buying one property while negotiating the sale on another. Both are homes. He is moving from one to the other.
The seller/buyer has placed a contingency in his sales contract. It states that the purchase of the new property must be completed before he will sell his present property.
But there is a problem. The sale of the property our buyer wants hits a snag.
Meanwhile, the buyer of his property approaches our seller/buyer looking to complete his sale. He requests that the contingency is waived. The buyer wants to proceed as scheduled. Okay, all caught up? Here’s what happened.
The Contingency Dilemma Part 2: What Happened
The seller/buyer decided to waive the contingency. He bet on the hope that the delay to buy Property B would end soon. This did not happen.
The sale of Property A happened without a hitch. Our seller/buyer has no place to live. Furniture etc. is in storage. His other half had to move in with her son.
Note: Things could have been worse. He could have purchased Property B and not sold Property A. In this scenario he would have ended up with two properties to contend with. This is the other side of buying a property while selling another at the same time.
No Advice
When told of this situation I was asked what should he have done? Should he have kept the contingency?
First, no real estate professional would answer that question before the transactions are completed. It is doubtful a lawyer would answer that question. To do so would open you up to a lawsuit. If the buyer/seller took your advice and things went south you could be liable.
My Opinion
I said, “In my opinion, I would not have given up the contingency. If this buyer walked there would be another.” For me, it is important that I have a base of operation. If that base is my home then it must exist.
There is a reason you place a contingency on a contract. Unless that reason no longer exists or is replaced by a much greater one, leave it in place. This is my opinion of course.
Note: If you do decide to waive the contingency make sure you have a great backup plan. Miscalculate and you could end up with an unforeseen financial problem.
So how did you do? Would you have risk waiving the contingency? Or would you have risked the loss of the sale? There’s still time to make your thoughts known. Leave your opinion in the comment section.
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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