Not Willing to Take a Risk?
By Jim Palmer Jr.

I’m not a gambler in the traditional sense, but I have been known to have propensity for risk.  Anyone who has seen me extract an elk from a precarious mountain location with a leery pack string, or watched me jump from tall cliffs into the deep icy waters of the Imnaha River knows that!

I was thinking about risk today when a broker explained to me their dilemma with a buyer client.  The buyer could not understand why a certain seller would not accept their full price offer.  The problem with their offer was that they have to sell a property first and cannot complete a new purchase without selling.  They also didn’t like the fact that the contingency addendum had a “bump clause” which means that the property could be marketed to other buyers and another buyer with a better, cleaner offer could bump the contingent offer,…unless they were willing to remove that contingency and risk losing earnest money if their other property didn’t sell by the specified closing date.

What the seller was communicating in their counter offer was that they would take their offer and forego the bump clause, IF the buyer would make a significant non-refundable deposit, paid directly to them to offset some of their risk.  The buyer was very squeamish at the thoughts of putting anything at risk, yet they were asking the seller to take significant risk in removing their property from the market on the chance that the buyer would receive an acceptable offer on their property in the middle of the winter.

Another reason the seller was not interested in removing the bump clause without compensation was that a “Contingent” status in the MLS would taint their listing, creating a barrier for additional showings and making it more likely that the contingent buyers offer would drag on and waste market time.

Like that one spectator left dangling reluctantly on the edge of the cliff listening to the elated shrieks of the cliff jumpers, that timid buyer is now left wondering whether taking a little risk would have been worth it. They may cower with their hand on their wallet for many more months before they realize they will have to be willing to take some risk to purchase any house in this fast paced market.  Jumping courageously into a house purchase isn’t quite as thrilling as leaping into ice water from 35 feet, but it would certainly be more satisfying!