What are contingent liabilities when buying a home
House sale: no right of termination?
The most likely reason for this is because the moving company wants a guaranteed sale to get a new mortgage in the new location. Understand that the moving company generally works for a potential employer. So they try to make the process as painless as possible for the homeowner (who will likely be hired as a professional, either as a manager or as an engineer or accountant).
If the sale is guaranteed to go without any problems, it will be easy for them to arrange a new mortgage. In fact, they can bridge the gap by securing the initial funding and paying the down payment and then using the payout on the home you bought to buy out their position. That gets them hooked for a ton of money (a down payment on a house) while they wait for the house you buy to close.
This does not necessarily mean that there is something wrong with the house. The moving company would only find out about a bug if the owner disclosed it. They don't really care about the house they are selling. Your job is to make the transition easier. With a moving company, the more likely they are simply in a hurry and want to avoid a broken purchase. If for some reason that sale does not materialize, you will have to start over. That could cause the job change to fail.
This is a variation on a sale with no contingent liabilities. Sellers don't like contingent liabilities because they're simpler. Buyers don't like them because their protection is weaker. But some buyers will offer them because they get better prices that way. House flippers in particular often do this in order to get the house for less money than they could otherwise pay for. This is better than a straight sale with no contingent liabilities because you agree to the repairs.
This is a reasonable excuse not to proceed with the transaction. If this makes you feel so uncomfortable that you want to keep looking, that's fine. However, this also gives you some leverage as they are motivated to complete this transaction quickly. You can consider the following:
- Reject the offer as it is. If the offer is otherwise satisfactory, you should consider countering the same offer without this provision.
- Against with a lower price. Accept the determination but reduce the price you are offering for the house. Don't expect much here, but a small discount is reasonable. Note that you may feel that the current price is already offering that discount. Your broker can advise you on the competitiveness of their price.
- Withholding payment. Agree on the price but keep part of it (e.g. deposit) until all necessary repairs are completed.
- Check immediately. Offer to appoint the inspector quickly and with a shorter than normal deadline. You might find such an offer better than a rejection. After all, they are in a hurry to sell. This inspector can be separate from the mortgage inspector (the bank can do its own inspection later).
Or you can do a combination of these or something completely different that will make you more confident. If you do decide on a version of this provision, have the agreement drawn up by a real estate attorney. Also, insist on disclosing previous failed sales and the reason for the failure before signing the agreement. The lawyer can make this request in such a way that he receives a truthful answer.
And again, in case you missed when I said this earlier. You can say no and simply refuse to proceed with such a determination. You can't get the house, but you save some amount of worry. As you move forward, you should be sure that you are getting good business. You are asking for special provisions; You should pay for it. Either your current business is already good (and it may be) or you should adjust it until it is.
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