Contingency for home sale, how do you make this work for your buyer?

In a perfect world, if I wanted to move to a new home, I would

• Find one
  
• Make an offer that is accepted
• Put my home on the market
• Sell my home in the first week
• Close on the home I am selling and the home I am buying on the same day
• Move from my old home to my new home over the long weekend
• Wa La, what could be easier?

Well, it could work like that!  And I have participated in a number of these types of closings.  But this situation takes a lot of care, diligence and crossed fingers. 

Here are some helpful tips on how to make a transaction like this work, and work well:

1. First get pre-approved for a mortgage for the home price you plan to spend on the new home.  Use your local lender either from your Bank or Mortgage Broker and find out what types of loans are available for your particular needs and situation.  Remember to get an idea of closing costs and terms that are involved so that you can factor in all of the costs to purchase.
2. Get your home in top notch condition to present to the market.  Your opinion of top notch condition is very important, but the buyer's opinion of top notch condition is what counts.  Your Realtor can help you evaluate your homes condition.  A pre-listing home inspection can help you identify and fix any needed repairs prior to presenting your home to the market.
3. Find out what the best pricing position is for your home in the current market.  Take into account that having a home that is priced right will bring you the most money in the shortest period of time.  Underpricing works even faster!  If you overprice a home, it won't sell, and you won't be able to move.
4. Start shopping for your new home.  Seek and find the home that fits your needs the best: location, price, size, style. 
   
5. Have your buyer's agent, (who will most likely be the seller's agent for the home you need to sell) prepare an offer on the home.  Your marketplace will determine what kind of price your offer should be, your agent will help you with this.  Ask for a closing date that is far enough away to make the sale of your home completed in about a 45 to 60 day period.  Insert a contingency for sale of your property into the offer.  Give the seller's agent information that will help them understand that you are prepared to go on the market the day after this offer is accepted (because you've done steps 1-3).  Be prepared to agree to a first right of refusal condition.
6. In your offer I recommend that you complete your loan application and home inspection within 2 weeks of offer acceptance.  Work on the contingencies for your home purchase in a timely manner so that you show good faith to the seller, allow time for inspection issues to be negotiated, and you become ready to complete the transaction with most contingencies removed.
7. Put your home on the market within a day or two of your accepted purchase offer.  Make your home easy to show and sell by having it placed on the local MLS, use a lockbox, get any pets out of the picture for showings.  Your Realtor can help you with the best procedures for showings.
8. If you priced your home for the current market, and your home is in top notch condition, you should have showings by Realtors who work with lots of buyers in the first week to 10 days.  You should receive an offer that is acceptable within the first 2 weeks, maybe as long as 30 days.  If you haven't received an offer by then, review the price and condition with your Realtor.  If you do not have an offer in this time period, you may need to renegotiate your purchase offer on your new home for an extension of the dates.  Many a deal is done if both parties are willing to work towards completion.  The seller of the home you are going to has probably left their home on the market with a first right of refusal notice in place.  If your home is not moving, they may not negotiate an extension if they want to make their home available to more potential buyers.  If they like your price, and they feel you will follow through with the sale, they may just hang on with you.  Remember, they want to move on as well.  On occasion we do have a domino contingency sale where 3 homes sell on the same day and everyone must have nerves of steel to see this process through.  These are the type of deals that keep a lot of people up at night! 
   
9. If you work through all of the contingencies, for all parties involved, everyone gets to move! 
   

I think that preparation is the key to this process.  There are other ways to change homes that are less stressful in some ways.  Often they involve staying with relatives after the home you are selling closes or moving to a rental.  Then you can shop without needing to worry about a contingency of home sale.

I know this is lengthy, and I have probably left out a few things, but I hope it gives you an idea of how this can and does work all of the time.