Coming into the Spring Market of real estate, I am fielding a lot of concerns about the logistics of Buying a Home when you have a home to Sell first. It is not an easy process, but my Team is doing it a lot for Metrowest area homeowners.
Most people need the funds from the sale of a home to help purchase the next home they wish to buy. 10 years ago the selling process was so fast and for such a profit that the risks faced were minimal. Let's clear up a few realities now though:
- The chances of locating your perfect home that accepts a condition for you to sell 1st are slim to none.
- The mortgage industry does not have the bridge financing programs that you remember, forget it.
- The buyers really don't care what you "need" in order to buy that next home. Your needs don't affect Market Value.
- There is no guarantee with this process, so come up with backup plans, even when tough to consider.
- GOOD NEWS ALERT: If you are "upgrading", the home you are buying is much cheaper than 6 years ago... A SALE!
Here are the Top 4 areas to consider when going thru this process:
1. Advice: There are many steps in this process, and the balancing of getting a strong Buyer on the hook for your home, and moving ahead on buying that next home aggressively, is nerve-racking. An experienced Realtor will be able to price your home correctly to meet your goals, take steps to keep deals together (see #2), find you that next home, arrange temporary options if needed, and hook you up with professionals in the area to help on every step.
2. Preparation of Selling First: You will need to sell your home first, in a marketplace that has been beat up over the past several years, but is facing low inventory and heading back up. Here are tools that I refer:
- Price the home correctly - Get a Market Analysis from an experienced Realtor
- Conduct a pre-listing home inspection - Find out what the Buyer will hear, address things ahead of time
- Stage the home - I have hired a professional for years on my listings, and all I can say is It Works
- Move out "most" of your clutter - Storage lockers, moving companies, Containers on Wheels (COWS)
- Clean and repair - Yes, spend money to make money
3. Keep One Eye on the Marketplace: There is very low inventory of homes to buy. You need to get educated on the prices of homes that are selling so that you can be decisive and confident when it is time for you to submit an Offer. Shop casually when you are on the market, and crank it up when you get that contract on your home. Also keep your Mortgage Pre-approval updated.
4. Understand your Plan B and Plan C: The number 1 concern that people have who are faced with this situation is "What happens if I DON'T LIKE homes available when I sell my home?" The only response I have is that we need to be ready to look at backup plans like living with friends, family, extended stay hotels, renting, etc. I can tell you it happens less than a successful "back to back" closing, but there are no guarantees.
This job is most enjoyable when I complete a process that had dozens of variables, and over the course of several months of work, comes together at a closing table.