What is a Predicated Offer?
Predicated Offer What is a predicated offer? A predicated offer in real estate is one that includes a contingency giving the buyers time to sell their existing home. For example, let’s say that you own a home in the Garden District. You’d like to downsize and buy a downtown condo, but you need the funds from the sale of your existing home in order to finance the purchase. You stumble across the perfect condo, but your house isn’t sold yet. Enter the predicated offer. Essentially, you’re asking the seller to accept your offer and hold their property for you until you’re able to sell your own, telling them "wait for me, please". The pros of predicated offers A predicated offer will allow you time to get your property sold and not miss out on the new place you want to buy. The cons of predicated offers The seller will continue to market their property and can, with the appropriate notice, accept another offer if you can’t remove your contingency. You may have spent money on inspections and even an appraisal, only to lose it all if another qualified buyer comes along. How does that work? As part of the initial offer, buyers must lay out a time frame to remove the predication if another offer is received (usually 24-72 hours). It’s VERY IMPORTANT to note that when buyers remove the predication contingency, they are also removing all financing contingencies. That leaves buyers on the hook to perform, whether they can get a mortgage or not. The best predicated offers What’s most likely to get a seller to accept a predicated offer? Being able to provide them with a copy of an accepted offer on your existing home. It provides a level of comfort that your home is going to successfully sell and that you’ll be able to move forward with your purchase. The worst predicated offers What’s likely to get a seller to reject your predicated offer? Several things. Is your house not even on the market yet? Is it priced too high? Is it in a neighborhood that is historically slow to sell? If you are buying in a hot neighborhood, there’s absolutely no incentive for a seller to accept a predicated offer. A seller’s market means that they can simply wait for the next offer that doesn’t have any contingencies beyond the norm. Don’t try this at home If you’re considering making a predicated offer, our advice is to use a professional REALTOR® to guide you. The pitfalls can be huge for do-it-yourselfers and you don’t want to find yourself out of both your deposit and the home of your dreams. Need more home buying advice? Call us today at 504-327-5303 and we will be happy to earn your business.
What If You Find a For Sale by Owner?
Beware of the temptation to call the number on a For Sale By Owner (FSBO) sign when looking to buy a home. This seemingly convenient option can actually work against you in several ways, particularly by giving away sensitive information that your agent wouldn't want disclosed. When dealing with a FSBO, they have no legal obligation to keep your information confidential or prioritize your interests. While it may seem appealing to negotiate directly with the seller, keep in mind that your REALTOR® is a professional who can provide you with valuable insights and potentially secure an even better deal for you. FSBOs often lack access to recent sales data, which, combined with their pride in their home, can lead to buyers overpaying for a property. Of course, exceptions to this scenario exist, but it's important to remember that your agent's role is to safeguard your interests. So, instead of making direct contact with a FSBO, simply make note of their contact details and pass it on to your trusted agent, who will not only help you find a home but also ensure a successful purchase. Looking for the right place in New Orleans to call home? We’ve got them all, right here. Thousands of homes for sale, experienced agents, and someone waiting to help you today. Call us at 504-327-5303
Should Home Buyers Write Love Letters to Sellers?
Should buyers write letters to home sellers? In a hot real estate market, buyers sometimes feel tempted to include a letter with their offer. It's a way to express their love for the house and their desire to turn it into a home of their own. Agents often encourage this letter-writing campaign, suggesting it as a method to make your offer stand out amidst multiple offers. The good Writing a letter to a homeowner helps humanize you as buyers in the eyes of the seller. It transforms you from just a name on a purchase agreement into a real, live person or family. Making yourself stand out from the crowd can't be a bad thing, right? Read on. The bad Including photos and personal information in your letter is a potential Fair Housing violation. If a seller based their decision on anything related to a protected class (race, color, religion, sex, familial status, or national origin), it could lead to trouble. A responsible agent shouldn't encourage you to offer information that might be used for discrimination. An even more cautious listing agent would refuse to accept or present the letter, avoiding any appearance of impropriety. We strongly advise against participating in this practice, as fair housing violations can result in hefty penalties starting from $10,000. How can you make your offer stand out? If you know you'll be competing with other buyers, focus on writing the strongest offer right from the start. In the end, the bottom line is the only thing the seller should consider.
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