Predicated offers are another way to say you have a contingency in the contract for the house you are buying or selling. However, this contingency is specific to when you (or the buyer) have to sell your house before buying a new house.
When you must sell your existing home to have the money for your new house, your agent will mark it accordingly on the Louisiana purchase agreement.
FYI: a contingency means a certain piece of criteria must be met before the sale closes. For example, almost all buyers have an inspection period on the house. This is considered a contingency. Same for financing – the house sale is contingent on your receiving financing from a lender.
How is a predicated offer different from other offers, though?
Almost all offers have some contingencies (like inspections and appraisal) – but this one can be trickier. Not all sellers want to accept a predicated offer out of fear your house won’t sell.
Can the seller still take other offers if we have an accepted offer?
Yes, they can. This works because if the seller gets another offer that isn’t predicated, they will typically give you 72 hours to remove the contingency that you need to sell your home first. If you can’t do so, they may take another offer and cancel the contract with you.
Removing the predication
By default, when you remove the predication in our paperwork, you are removing all your financing contingencies.
This is a bad situation to get yourself into. If you still need a loan, do not remove all your financing contingencies.
How do I get the seller not to accept other offers?
If you have the cash to make a downpayment without selling your house, then make the offer without it. (However, just because you have the money does not always mean your lender will give you the green light. If your debt to income ratio is too tight, this may not be an option.)
You can always ask the seller not to entertain other offers. This is called a closed predication. Getting a seller to agree to this isn’t the easiest thing in the world, but it can happen with the right incentives!
What happens if I remove the predication but not my financing?
This is the best solution to make all parties happy. Again, you must have the money to buy your new house without selling your current one. Otherwise, you’re lying on your contract – and that is a BIG no-no!
What’s the best way to have a seller accept a predicated offer?
Most sellers do not want to accept these types of offers unless your home already has an accepted contract.
Let’s talk about if you need to buy and sell at the same time! Text us!