Simultaneously, buying and selling a home can be a tricky proposition, especially in the current "Buyer's Market."
Kinda like "Which came first, the chicken or the egg?" Do you find the home you want to buy and then put your home up for sale or do you put your home on the market before you start looking?
Let's assume you don't have to move, You just want a bigger, smaller, more expensive, less expensive home, or a different location. First you want to make sure that the home you desire is out there. So, you decide to start with a home search. Amazing - there it is - the home of your dreams...but...you haven't even taken the first step to listing your house and you need to sell it, in order to buy.
Okay, maybe the way to go is to make sure you can sell your house, before you start thinking about your new dream home. But what if a buyer appears the first week and you haven't even begun to identify the home you want to buy?
You get the picture. Making both sides work together can present an interesting balancing act.
You don't want to miss buying the great listing, that just came on, but you also don't want to sell your house and have no where to go. What you want is both transactions to happen together.
In the not too distant past, buyers were falling over each other to outbid the competition and purchase everything that came up for sale. Ah, the good old days - a red hot "Seller's Market." But, times have changed. Listings are now taking 80, 90 100 days or more, to come up with an offer. Prices are being reduced once, twice, maybe three times before they become enticing enough to get buyers to "pull the trigger."
So, what's the solution? It may be time to dust off the old Hubbbard Clause. Exactly what is a Hubbard Clause?
A "Hubbard" is a contingency, added to the offer to purchase. If the seller agrees to it, it will be added as a property sale contingency or addendum to the sales contract. The contingency states that the purchase is contingent on the Buyer selling his/her property (typically, their current home.) There will be a stated time period in which the sale must take place. While the Hubbard is in effect, the Sellers can continue to market their home and should they come up with a legitimate offer, the Buyer is given the option of removing the contingency (usually within 1-3 days) and proceeding with the purchase.
During the "Hot" market, many sellers would not accept a Hubbard. In effect, they felt it was taking their home off the market. Often, agents would not show a Hubbard property or discouraged their buyer clients from making an offer on a Hubbard, citing that it would only be used to up the ante on the first buyer.
In the current environment, the Hubbard Clause may serve to facilitate the sale of both properties. The sellers know that the buyers want to make the purchase and therefore, have the incentive to be more negotiable in the sale of their present home. Sellers also have a better opportunity for receiving subsequent offers. An astute agent will advise his or her buyer clients that, although the first buyers will be given the option to remove the contingency, if they do not have offers on their home, they may not be in a position to do so. Thus, giving the second buyers a reasonable shot at making the deal.
Copyright © 2008 Marilyn Katz, WestportCTProperties.com, All Rights Reserved, Get the Hubbard out of the Cupboard - buying and selling in a "Buyer's Market