Why is our Realtor against us putting an Offer On A House, with a Contingency Agreement (to sell our house)?

Our Realtor is NOT refusing to take the offer, she just doesn't suggest it. And, our house is NOT currently on the market. We live in a highly desirable area (our next door neighbor had an Open House recently, and over 300 people showed up!) so we wanted to find a place to go, first. The Realtor is suggesting we take out a Home Equity Loan for the FULL AMOUNT OF THE NEW HOUSE (we are qualified to do that, BUT, we would end up with a $6500.00/month payment, until we sell our house). THERE IS JUST NO WAY WE CAN HANDLE THAT! Has anyone else been through this??? I'd really appreciate your input!
Additional Details
Additional Information: Our area hasn't been affected by Today's Market, most homes here go Under Contract within 30 Days (including my Neighbors!) of the Listing. The Realtor is ACTUALLY the Seller's Agent (I know, bad idea!) she is working for us, as a Disclosed Dual Agent. She would make about $18,000 to $24,000 ~ her commission only ~ on this sale. That "Kick Out" clause sounds like a GREAT option! Thanks EVERYONE for your input!

First of all, you need to clarify your relationship with "your" realtor: Did you hire this realtor (ie a Buyers agent) or is he/she the listing agent for the home you are looking to buy? If it's the latter, the agent is paid by the seller of that home, and has a fiduciary responsibility to that seller - not you. This is important. It doesn't mean they will only give you bad advice, it just means that at the end of the day they represent the seller of the other home, not you, and will give advice that is generally more favorable to the seller.

But for the time being, let's not assume the worst. Your realtor's suggestion may be based on the conditions in your market - if it's a strong market, the home you are considering purchasing may receive multiple offers. The seller will evaluate the contracts, and choose the "strongest" offer - typically the one with the best combination of price and conditions (ie contingencies).

A home sale contingency is one of the worst contingencies a seller can accept, because they have little control over it. Depending on how it is written, the seller is basically agreeing to take their home off the market for a significant period of time on the chance that your home will sell - a dicey proposition from the seller's perspective. Unless they are desperate for an offer, the chances they will accept a home sale contingency is small.

That said, you're right: What the realtor is suggesting is risky. If you make an offer on the other home without a contigency (to sell your home) you are obligated to purchase the other home regardless of whether your home sells. (I suppose if you don't sell your home you could default on the purchase contract to buy the other home, but that's an ugly scenario that could open you up to litigation).

One option is to make an offer on the other home contingent on the sale of your home, WITH A "KICK-OUT" CLAUSE.

Here's how it works: You design the home sale contingency such that you have a ratified contract for the purchase of the other home. In the home sale contingency you a set period of time (say, 30 or 45 days) to obtain a bona-fide contract for sale for the purchase of your home. If you do not obtain a ratified contract for the sale of your home by the end of that time period, you have the option of a) removing the contingency (by showing your ability to proceed to closing/settlement on the other home), or b) terminating the contract (without penalty - make sure you specify that the entire deposit is returned to you). The contingency also allows the seller to continue marketing their home, and provides a "kickout" clause: If he/she receives bona-fide offer to purchase their home, you then have a set period of time (usually 48-72 hours) to "remove" the home sale contingency. This accomplishes two things: The home you want is under contract to you, and you can go about marketing your home. HOWEVER, during that period the seller of the other home can continue marketing their home. It's sort of a win-win. If, at any time during that period the seller of the other home receives a purchase offer, that activates the "kickout" clause: You then have 48 (or 72, whatever the contingency says) hours to "remove" the home sale contingency by providing adequate proof of your ability - ie financial - to preceed to closing on the other home.

There's plenty of boilerplate kickout clause language out there - the realto should be very familiar with it and should be able to provide some. I hope this helps you. Good luck!

its just that a lot of home owners dont like contingencies. what if you're the only person that gives them (whomevers house you make an offer on) a good offer, and then your home doesnt sell for like 6-8 months? then those poor people are stuck in their house, and what if they bought a new one too? its just a domino effect.

I'm sure there is more to this story.

If the area is so hot, I'm guessing that the new home that you purchase will NOT take a contingency.

If your house will sell quickly, get it sold and then purchase.

Your Realtor isn't very smart as well as giving you very poor advice.

I am SO GLAD you are smarter than she is.

This is what I would do if I was your Realtor.

I would put your house on the MLS (no one says that they have to put a lock box on your property....get it?) that way you can technically say it's "on the market".

All the sellers want to see is a copy of the listing agreement and the MLS printout as evidence it's on the market.

I would so write the contingent offer ALONG with evidence of any and all recent sales in the last 6 months to demonstrate how often they were on the market before they sold.

If I were representing the seller...that is a VERY good offer if the homes sell as quickly as you say they do.

Keep in mind that contingent offers typically allow for the sellers to continue to market the house with a 48 to 72 hour kick-out clause to give you a chance to remove the contingency, should a back up offer come in.

Alot of people have posted that have no idea of how a contingent contract really works...it is NO RISK for the seller whatsover if the offer is presented correctly....b/c the kickout clause gives the BUYER one last opportunity to remove the contingency before the seller can move-on to the backup offer.

Your agent may not suggest it because your home isn't listed or up for sale yet. If I had a home for sale and an offer came in contingent on buyers selling theirs and it isn't under contract to sell or even listed yet I wouldn't except it. You should at least have your home up for sale first. And the advice of taking an equity loan to purchase the home before you sell yours, I have seen this turn out bad in every case I have been involved in. The payments can drain you if your home doesn't sell soon. I say List your home first then start looking. If you happen to get a quick offer you can accept the offer contingent to you finding another home or rent a place for a short time.

How much money would she be getting if you did it her way? I would have to say FIRE her and get someone who is looking out for your best interest, not hers!!!

He's eager to get his commission, Since he has to wait for possibly a long time, based on today's market.

Think about the situation as though you were the seller. A buyer who hasnâ€™t even listed their home for sale, meaning you have no proof they actually intend to sell their home, wants you to accept an offer contingent on them selling that home. Would you be ok with that?

Your agent is concerned that your offer will be rejected; you are asking for a contingency for something you arenâ€™t even doing. If you are in a buyerâ€™s market, it may take months for your house to sell once itâ€™s on the market. It doesnâ€™t matter if next door had 300 visitors, what matters is how many offers they got. Did they get any?

Your agent doesn't want to do it because such contingency clauses are usually not well-received by the seller, so the offer may well be rejected. But you're the bosses, so if you want to make the offer, tell her to do it.

put your house on the market. do not sign any papers for the new house untill you have sold you own home. many people are paying for two mortgages.. re agents are doing anything to make a sale.

Your Realtor is quite correct. If you place a contingent offer on another home without having YOUR home at least listed for sale, you're going to be most probably rejected outright.

You need to at least have your property listed for sale, at a bare minimum, before tendering a contingent offer.

As well, if you tender a contingent offer, your offer will include (or be countered to include) a very short period of time (perhaps 48 hours) for you to remove your home sale contingency, or you're out of the picture, should another desirable offer come around.

Sellers will NOT accept your offer without such an agreement. They want to sell, and they will cover their backsides accordingly.

Great that your neighbor had a wonderful Open House! Did they get any offers?

It's a hassle, but in this market, sell your house first. That way there is less chance of the deal falling through on your end. Certainly, know where you would like to live and be aware of what's available. If you do it this way, you may have to move twice, but you won't be paying double mortgages for months!

She is looking our for herself, not you! Our friends did this, and - surprise - they have two house payments now. Their realtor told them they'd have no problem selling their old house at all.

Ditch you realtor, buy it directly from the owner and have them subtract the realtors fees from the selling price! Pay a lawyer $250 to help you look over the paperwork, if you're concerned.

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