What are your options if you’re looking to buy and sell all at once?
Many people who are thinking about moving are facing a dilemma in today’s market: They’re hesitant to sell their homes because we’re currently in an extreme seller’s market and homes are difficult to find and purchase. If you’re in this position, know that moving is still possible—you just have to prepare yourself in the best way possible so that your offer will be accepted when you bid on a home against other buyers. Today I’ll share a few tips about how to position yourself for success.
First, let’s say that you’re in a situation where you can afford two mortgages. In this case, you could go ahead and submit your offer on a second home and put your current home on the market. You’d just have to get a financing contingency for your new loan. Ideally, you’d have your home paid off, meaning that you’d only have one mortgage.
It could also be that you have cash in the bank that you can withdraw or a 401(k) that you can borrow from for a while and repay yourself when your current home sells. In a seller’s market like this, cash is king. It’s important for buyers to come in with as few contingencies as possible so that sellers aren’t concerned about the risk.
But then suppose that you don’t have enough equity in your current home to afford the down payment or the whole purchase price—what are your other options? Some people have a vacation home or even an RV that they can move into for a couple of months while they look for a new home. Others can stay with friends or family.
If none of those options work for you and you need to sell your house before you can move into the next one, then there are several things you can do:
1. Write a contingency in your listing that states you have X number of days to locate a home for yourself. If you can’t find a home, however, then your deal will fall apart.
2. Wait to list your current home until you’ve found one to buy. If you go this route, you need to be ready to jump on that new home immediately, since your offer will be contingent on the sale of your current home. If you’re not ready to put your home on the market right away, accepting your offer will be a huge risk to the seller.
3. Create a timeline. Whenever you receive an offer on your current home, put the closing date three or so months away so that you’ll have time to search for a new home. There is some risk involved with this option, depending on the market.
Before you begin this sometimes-tricky process, I encourage you to reach out to me. Let’s sit down and discuss what options suit your situation. I will never allow you to become homeless when you need to sell your home.