So you’ve decided to move, now what? For many, the logistics of selling their current home, and finding and buying a new one can be paralyzing. And rightly so! Do you sell and hope to buy a new one before it closes? Do you try to buy contingent? Let’s talk about some of your options.
Buy “contingent.”
This one generally sounds the best. You find the home you want, and write an offer that is contingent upon selling your current home. Once it’s accepted, you put your home on the market, and coordinate the two closings such that you only have one move once! Sounds great; but the reality is that in the current environment, sellers don’t like contingent offers – if they will even consider accepting, it may cost you extra money. Why take an offer that carries the risk of another home not selling when they could most likely find another buyer who has the money ready and can close in 30 days? Additionally, if your offer is accepted, you may feel a sense of urgency that will make you take less for the home than you would if time wasn’t an issue. But everyone loves the idea of only owning one house at a time!
Sell first, then buy before your purchase closes.
Again, only having to move once is seductive; but it has its risks as well. First, you try get a long close on your purchase so there is time for you to find a house. This may mean you have to pay a little more, or risk losing to someone with a quicker close. And now you have a ticking clock – you don’t need to put yourself in a situation where you may be forced to make a bad choice. To become an educated and prepared buyer, and then find a good house in this very low-inventory environment, is difficult to say the least. With nowhere to move to, you might end up making a very big, very costly mistake. An unscrupulous agent might advocate this plan, knowing this is the fastest and most likely way for them to get paid for two deals. I don’t like saying that; but it bears mentioning that not all agents always have their clients’ best interests in mind.
Sell/Rent/Buy
Probably the best move from a bottom-line perspective. You can sell the house the right way (properly prepared and without a timeline that might force premature price reductions), and then you can take the proper time to make a good buy. The down side, you have to move twice – maybe not a big deal for a single individual or a childless couple; but much tougher with a couple kids, a dog and two cats! Also you may sell your home at today’s price, and then watch the house you want appreciate for a year.
A couple wrinkles: If it’s possible to get a short-term rental, maybe even straight to month-to-month, you will be in a great position! Also, some people are happy to “couch surf” in their time between homes, or maybe they have family with a spare room….again, less ideal for a family than a single individual or a childless couple.
Buy non-contingent and then sell with a little overlap
Not everyone has the means to do this; but for those who do, this may be the most ideal option. As long as you are comfortable with the prospect of briefly carrying two mortgages, you can sell right, and buy right. You get to go house shopping from the comfort of your own home, pounce on the perfect home when it comes available, and list on a proper schedule, and with the right preparation. For our clients who have done this, this has meant closing on their new home and moving out. We then get the keys to a vacant home, and are off to the races with our suite of services (we pay to clean, landscape, stage, and HDR photograph it). Also, if there is a need to do work, we can manage a crew to do repairs, upgrades, and whatever else might mean more money to their bottom line. We had two big projects this fall where we were able to run a crew for our clients and get them at least a 300 percent return on that investment. Nobody loves to pay two mortgages; however, in today’s environment there is very little risk that your home will sit stagnant on the market as long as it is well-prepared and well-priced.
None of these options are without pitfalls, and many are absolutely overwhelmed, even paralyzed by the logistics of all this, and end up just staying put. This is not a one-size-fits-all situation, and there is probably no magic solution that makes it all seem easy and stress-free, but with the advice and assistance of a good real estate team, it can be done!
– By Jacob Pickett
Jacob Pickett of the Black+Pickett Real Estate Group born in Seattle and raised in Edmonds. He has been a realtor in the Greater Seattle Area for over 10 years , and enjoys the fact that no two days are the same in the real estate business. He and his wife are parents to two children — a boy and a girl.
