“Hold this for me”
That’s essentially what a buyer is asking you to do when they make a predicated offer on your home. They need time to sell their own home before they can purchase a new one. As a result, they write an offer asking you to hold the house for them.
How does a predicated offer work?
A predication is essentially a contingency. The buyer is making an offer contingent on the sale of another property. A seller can accept the offer, yet continue to market the home to prospective purchasers until the buyer can remove the contingency. That doesn’t usually happen until the buyer’s home has sold. We’ve seen cases where buyers have the ability to move forward without selling their own home, but it doesn’t happen often.
What if the seller gets another offer while waiting?
If the seller receives another acceptable offer, the buyer with the predicated offer is notified and given a chance to remove the predication/contingency and move forward with the purchase. (The amount of time given for the buyer to do so is negotiated in the original contract) If they can’t remove the predication, the seller can cancel the contract and accept a new offer.
Are there any drawbacks for sellers?
Definitely. When you accept a predicated offer, your agent will change the status of your home in the MLS to “O” for Open Predication. Despite our best efforts, there will be some agents that just won’t show your home once the status has been changed.
PRO BUYER TIP: When the market is hot, sellers have almost zero interest in predicated offers unless the house on the other side is also in an extremely hot market.