October 15, 2019
4 MINUTE READ
The changing market means that sellers are more willing to take offers that they previously may not have. That includes offers contingent upon the sale of a home.
The idea of buying and selling your home at the same time may seem scary and overwhelming but it doesn’t have to be. With a strategic plan in place and the right team behind you, you can do it!
Here are a few tips that we’ve learned from our experience with clients who have been successful in this tricky scenario:
One of the biggest decisions you’ll need to make is whether to buy first or sell first. But, sometimes, that’s not up to you. Market conditions can greatly impact which of these events come first.
A buyer’s market, for example, exists when there are more homes available than people looking to buy. It gives buyers an advantage — and you’ll probably have an easier time finding your new home than you will in selling your old home.
The opposite is a seller’s market in which there are more buyers in a market than there are homes available. A seller’s market gives sellers an advantage and, in this scenario, you’ll likely be able to sell your home faster than you’ll find a new one.
If you’re in a buyer’s market, there are a few scenarios that could play out. Sellers may be willing to accept a contingent offer — which means you could make an offer on your new house contingent on selling yours first. Similarly, you could request an extended closing date to give more time for your home to sell.
If you’re in a seller’s market (where your home may sell your home before finding another one), you might consider asking your buyers to do a rent-back after closing to give you more time to find a place. You could also make an offer with a settlement contingency.
Next up, explore your loan options. Bridge loans are popular in this scenario. A bridge loan is a temporary loan, secured by your existing home, that can “bridge the gap” — allowing you to purchase a new home even if your other home hasn’t sold yet. In essence, you’re accessing your home’s equity before you sell and can use that for the downpayment on the new purchase.
There are pros and cons to this scenario, so it’s always best to speak with your lender to determine if this is the right option for you.
To strengthen your offer on the new home and show you’re serious, it’s important to have a signed listing agreement with a Realtor for your existing home.
Not only will you want to find a qualified agent in your market, but you’ll also want to prep your home for sale. This may include decluttering, repairs, staging, listing photos, and more — and it can help improve the chances of your home selling quickly.
Remember, buying and selling a home at the same time doesn’t have to be overwhelming. With a solid game plan and a knowledgeable Realtor by your side, you can achieve your goals. Just remember to be patient and flexible — there are a lot of moving parts that need to align.