Do you buy a new home or sell your current home first?

By
Real Estate Agent with Long & Foster Real Estate Inc 610-225-7400 PA License - AB067198

Do you buy a new home or sell your current home first?

In today's real estate market with low inventories at almost all price points other than the $1 million to $2 million range the question asked by many potential home buyers is "Do we buy first or do we sell first?"

It is highly competitive out there buying a house today and for sellers when they list a home there is a big chance they will get multiple offers to select who the next owner of their home might be if it is correctly prepared for sale.

I decided to take this question to Mike Graff of Prosperity Home Mortgage, LLC to see what he suggested and if he had any answers.

So two suggestions from Mike, 1) Make an offer conditional upon the sale of your home, as Mike admitted this is often rejected by sellers who have just listed and are unwilling to take a chance on you selling your home quicklyas well. 2) Leverage the equity in your home, if you have it, using a Home Equity Line of Credit to buy the new home. This is conditional upon you being able to afford both loans plus the mortgage on the new propterty till you sell your current home.

Another suggestion we have used in the past to good effect, which can be a little risky, is to ask the seller if they are comfortable with a long settlement date. The settlement date can be moved up if your house sells quickly and all parties agree. The seller of your new home may be in the same position you are and have not yet found a home to buy, or even have purchased a new construction home and have a delay till settlement due to construction.

Having the right agent to represent you as a buyer is important. Your buyers' agent can discover what terms are most beneficial to the seller. Many buyers today mistakenly think using the listing agent is going to help them win a competitive offer situation, possibly saving the seller money or influencing the listing agent to put a more favorable light on their offer. But what these buyers don't understand is the listing agent has a fiduciary duty to the seller not to you the buyer. The commission has already been agreed upon in the listing agreement and it is far better to make sure you have a buyers agent whose fiduciary duty is to you the buyer to represent and protect your position throughout negotiations and through to settlement.

An agent earns their commission not in finding a home or getting an offer but in making sure all the details of the agreement are handled correctly after the agreement becomes a contract and that all parties uphold their end of the contract as per the agreement, including those outside of the contract such as inspectors, title companies and mortgage lenders chosen by you the buyer.

If you are looking for help buying and selling on and around the Main Line then call Nick Vandekar, Long & Foster Real Estate, office 610-225-7400, cell 610-203-4543,(best number), email Nick@VandekarTeam.com.

 

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Delaware County, PA
Montgomery County, PA
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Rainmaker
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Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

I tell home sellers/buyers to put their house on the market first, get it under contract, and then make an offer. Most people can't afford two homes!

Jan 10, 2017 03:32 AM #1
Rainmaker
4,045,122
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning Nick and Trudy.  This scenario is a tough one for many and is one reason why some folks don't even try to move.

Jan 10, 2017 05:05 AM #2
Rainmaker
2,473,035
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker

Good morning Nick and Trudy. It is not an easy situation to solve and depends on a person's tolerance for risk. Some win and some lose! Enjoy your day!

Jan 10, 2017 05:39 AM #3
Rainmaker
602,229
Nick & Trudy Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtors, Philly Main Line

Kat Palmiotti I agree, most cannot, however, our area is pretty affluent and a lot can carry two homes. We very often see vacant homes for sale after a seller has moved out.

Gabe Saundeers we are seeing many more building large extensions on quite simple homesto avoid the move scenario.

Wayne Martin absolutely, tolerance for risk, we have had a lot of success this year with the longer settlement date with an option to move it up due to the lack of inventory homes are selling if priced correctly.

Jan 10, 2017 05:52 AM #4
Rainmaker
2,212,560
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Nick and Trudy... great post. With respect to #1, in my market making a purchase conditional on the sale of a home is virtually a guarantee that your offer won't receive serious consideration. As for suggestion #2, it has great merit for anyone who has the equity to put up. An easy option to forget about.

Jan 10, 2017 09:35 AM #5
Rainmaker
602,229
Nick & Trudy Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtors, Philly Main Line

I agree Nina Hollander, in our area option #1 is really a non contender, you have to find some other way around it.

Jan 10, 2017 09:43 AM #6
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Rainmaker
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Nick & Trudy Vandekar, 610-203-4543

Tredyffrin Easttown Realtors, Philly Main Line
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