Non-contingent offers

[syke-o]

How exactly does a non-contingent offer to buy a home actually work? I know that the purchase of the new home is not contingent on me selling my home to be able to purchase the new home, but is there more to it?
(damn that sounds confusing) :confused:

[JetBoatRich]

say that again :confused: is there a lawyer in the house?

[Mandelon]

No, your question makes sense. An offer can be contingent on a number of things, a clear title report, a roof certification, a clean inspection, etc. It sounds like you are trying to buy a house and the seller is looking for non-contingent offers???
They usually mean that they don't want an offer contingent upon the sale of your residence first. Almost all sales are contingent upon loan approval, appraisal value, etc. that's all normal. Call the agent and ask.......
[ February 21, 2003, 10:05 PM: Message edited by: Mandelon ]

[syke-o]

does non contingent then mean that no matter what, i as the buyer have to buy the place if submit a non-contingent offer?

[Mandelon]

No. Not necessarily. You can always get out of an offer situation.
The offer needs to specify upon what it is contingent. The purchase contract standard CAR form has boxes for all that crap. Even if your offer is not contingent upon the sale of your existing home, ie, you have a big savings account or some very high FICO scores, you can still make it contingent upon the appraisal verifying the houses worth, the title being clear, and an inspection report coming back with acceptable defects.
[ February 21, 2003, 10:08 PM: Message edited by: Mandelon ]

[SPECTRABRENT]

I would never write an offer without anyway out of the deal, for example, getting your loan (loan approval) or appraisal (value). Why would you do this?
If you write a non-contingent offer it means you must close the deal or loose your deposit, no matter what happens.
Good LUck,
Brent
Brentloan@aol.com

[Mandelon]

If its a bitchen house that everyone wants or is a sweet below market value...You damn well need to know what you're doing....But Brent's right it is better to have some type of contingency to get out.
If a seller is trying to go "as-is" be suspicious. Thoroughly check the TDS, Transfer Disclosure Statement and Agent's Visual Inspection, plus hire a good inspector!
Is there something wrong with the house?? Cracked Slab or mold?
[ February 21, 2003, 10:37 PM: Message edited by: Mandelon ]

[572Daytona]

A true non-contingent offer may not even be binding in some states, for example in Georgia a Wood Infestation (termite) report is mandatory. If you back out of an offer for a reason that is not listed in the contract in addition to possibly losing your earnest money you could also be sued for specific performance to make you go through with the deal. Talk to a real estate agent in your state or better yet a real estate lawyer before you put any offer to buy a house in writing.
[ February 21, 2003, 10:32 PM: Message edited by: 572Daytona ]

[Mandelon]

True, but in So Cal the markets are still moving quickly, its not likely anyone will mess with a specific performance lawsuit. I've read about them, but never known anyone involved in one.
I don't think you could have a true non-contingent offer anyway. Its always got to be contingent upon the seller producing clear title.
Do you have an agent? Find out what the seller is looking for........
[ February 21, 2003, 10:38 PM: Message edited by: Mandelon ]

[hot_diggity_dog]

Syke-O
The most common contingency people try to avoid is that your purchase on the new house is based on the contingency that you sell your house old house. In other words people try to make deals with no contingencies so the sale will not fall through.
When you spend 250,000+ for a house you want to protect yourself as best a possible.
Talk to your realtor, their the experts.
HDD:cool:

[flat broke]

Brent's info about leaving a "way out" is good advice. Simply put, and I think its been illustrated quite well above, a contingent offer means that your offer is made so long as a condition or group of conditions is met. With the way the market had been moving we were urging our sellers not to accept contingent offers as it puts not only their sale at risk, but also the purchase of the home they are trying to buy because if they need the proceeds from the sale of their home, and the accept an offer, then make an offer on their upleg purchase, they want as good of odds as possible that they are going to be able to close the sale of their home before they write the offer on their new purchase.
As far as a "way out" in California effective Jan 1 2003 the California Association of Realtors changed their purchase contract to allow a 7 (or 14, I need to verify) day recision period. If the Realtor does not make ammendments to the printed purchase agreement, the buyer will have that time period in which he/she could decide to back out of the deal for any reason. If you are a seller, or represent the seller, you can see why this new clause is a potential pain in the ass.
In reference to the statement about "as is" property. That statement is usually employed by inexperienced Realtors who want to cover their ass. The term "as is" is soooo open ended that it's basically useless in litigation. The bottom line is that if you are buying, you should have your agent look over the property with you and he or she would have to include in their observations, anything that looked suspect with the property. In addition, try and get the appraisal done before the conclusion of the 7 or 14 days (tough in California with the market being so hot with purchases and refi's) so that if the findings come back negative, you can bail if the owner wont agree to repair the issues. One other thing on that note. If you are ever having repairs done on a home as a contigency of the close of escrow, it is in your best interest to get independent quotes on the repairs and then have the seller reimburse you the cash instead of paying for the repairs with their contractor of choice. The reason being is that the seller will always pick the lowest bidder and that could come back to bite you in the ass down the road once the house is yours and you have to pay for the repairs to be done the right way.
I don't hit the boards much anymore, but if you have any questions, feel free to email me and I'll help you the best I can. In addition, if you haven't been pre-approved for a loan yet, I can assist you with that as well.
Good luck
Chris