I had a client that was very interested in purchasing a property and wanted to go out and start shopping right away. "These are all the things that the house must have.... here is what I am willing to pay.... I have excellent credit so that will not be a problem... I will have to sell my house, but I want to find a suitable replacement first."
Well, you might be ready, and almost willing, but you are not quite able at this point. That is, not without risk.
This is still a buyer's market, but that is changing. Especially if you are looking in a price range where you are in direct competition with numerous buyers that do not have a house to sell first. If you find a property and you want to make an offer, you will have to make it with a home sale contingency. With a home sale contingency, the seller is going to ask if your house is under contract with a buyer, and will assume that it is at least listed for sale.
If they find out you do not even have your house up for sale (and they most likely will), they may turn down your offer outright and consider that you are not a serious buyer. If you think you can make a low offer when you have a house to sell, you might as well save yourself the effort. However, in the event your offer is accepted, the seller will most likely include a 48 hour first right of refusal clause. The seller will continue to market the property for sale with a disclosure that it has an offer pending with a home sale contingency. Be aware, this leaves a window of opportunity for another buyer (which I will mention later).
Now what? You love the house and do not want to see someone else purchase it so you are faced with finding a buyer for your home really fast. How do you sell a house really fast in this market? You have to price it very aggressively. Even then, it does not guarantee that you will sell your house fast. Not to mention that being in a position where you have to sell quickly will make you much more susceptible to accepting a lower offer. What did that just cost you? Oh, and what about that buyer that makes an offer to purchase your house, but has a house to sell first. Do you want to accept the offer with a 48 hour first right of refusal? Not really.
Say it isn't so, someone came forward and is able to buy the property you have an option to purchase? They can if they have like (or better) terms. You are now forced with a decision. Either remove your home sale contingency and purchase the property, or forfeit the house which will then be sold to the other buyer. That hurts, you just lost the house you really wanted. Now you have to start all over again.
A better solution, would be to list your house for sale now. If you are afraid that you might not be able to find a suitable replacement, then disclose that in your listing and make your sale contingent upon finding suitable housing. It is not difficult, and will give you some peace of mind.
You will be perceived as a serious buyer when you start shopping for your replacement home. Any favorable action that you can take toward improving your ability to purchase will bring you closer to a successful outcome. It will also save you money. Call your Realtor today and ask for more details.
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