Things to Consider When Buying & Selling Your Home at The Sametime

Things to Consider When Buying & Selling Your Home at The Sametime

The decision to sell your home is always a big one! Maybe you're downsizing from a large home to a smaller home, or just the opposite, your once perfect home has just become a little too cramped... or maybe you're going from a rental to your very first home! Regardless, whatever the reason is to move, it's always a project!

So, you decided to move...  now, what will you buy? Homes, in general, are moving very quickly due to a lack of inventory. The good news is that usually means that we're in a seller's market. A seller's market suggests that you could potentially get a higher dollar amount when selling your home. The other great news is that the interest rates remain at all-time lows, so buying is also more affordable and your dollar stretches farther than it has in the past. 

When we consider a seller's market with low inventory, we often see seller's shying away from taking an offer contingent on the sale of a home... now you're probably wondering well then how will this work? In a fast moving market, it's actually better to sell your current home first and have that under contract BEFORE you even start looking for homes. I know this is often very hard to do and most wonder well, why would I sell if I don't know where I am going?

As a professional Realtors we get it, but let's circle back to the reason you decided on moving in the first place. Maybe a job transfer or something where there really isn't much other option than to put your home up for sale. So you know "now" is the time to sell.... here's how it will work.

Talk to a lender, credit union or a small local bank and get a credit approval to purchase your next home. While you're discussing financing options of the new home, discuss a comfortable payment option. Based on your payment comfort level, you will know approximately what price range to search for your new home. The ideal situation is if you can qualify to carry (or have two mortgages) not that you ever want to pay on two homes at the same time, but if you can show even for a week or two, that you can qualify for two homes, it's possible that you will be able to write a purchase agreement on a new home without making it contingent on the sale of your current home.

Writing an offer on a home before you sell your current home

So what does that really mean? 

Provided that you have talked to a lender and he tells you, you cannot qualify for two mortgages, but maybe you already have your eye on a home you found online. You call your Realtor and they agree to show you the home. Since you have not sold your current home, the offer that you would write would be contingent on the sale of your current home selling. Anytime you write an offer you should always have your agent review comparables to make sure your offer is in line with market values. Right now, we're in a fast-moving market where most homes are selling in multiple offers so the need to be competitive is really great.

The downfall of not being able to carry two mortgages and not having your home on the market is you risk not having your offer competitive enough for the seller to accept it. Anytime you are writing an offer contingent on the sale of your home it becomes a risk to the seller.

Writing an offer on your home after you sell your current home

When it comes to competition, it's easier to complete, especially in a multiple offer situation if you have your current home under contract. Then instead of it being contingent on the sale of a home, it's contingent on the successful closing of your current home.Clean, clean, clean your home, declutter your closets, drawers, and bookshelves. Pack away out of season clothing, remove knick-knacks, clean and remove utensils and kitchen electronics off countertops. Ask your agent for staging advice, use a Realtor with a market plan and a professional photographer and get that home shining. As soon as your home is listed and priced appropriately for the market take a look at a few homes to get the feel for the type of home that will be the best fit for your next home.

It's a little less risky for the seller to accept an offer on a home that is already under contract. This tends to be the path of least resistance when it comes to a fast-moving, competitive markets. Plus, from a Realtor's perspective, it's tough to see a buyer get beat out in multiple offers, especially when they have really fallen in love with a home.

In a fast market, it's possible that can still happen, but waiting till the home is sold usually puts all parties in a better situation to work through the offer. Of course, if your lender can show that you carry two homes it would not be such an issue. The biggest hurdle is getting the closings to line up. It's obvious you will be moving and packing and cleaning your home before it closes, but if you need the proceeds from your current home to put down on your next home it will need to close in the morning and the home your purchasing will close in the afternoon.

A POD or something similar is recommended as you will have to be completely out of your home prior to closing. The POD can then be picked up from your old home and moved to your new home.

Make it a Positive Experience

Clean, clean, clean your home, declutter your closets, drawers, and bookshelves. Pack away out of season clothing, remove knick-knacks, clean and remove utensils and kitchen electronics off countertops. Ask your agent for staging advice, use a Realtor with a market plan and a professional photographer and get that home shining. As soon as your home is listed and priced appropriately for the market take a look at a few homes to get the feel for the type of home that will be the best fit for your next home. Talk to your Realtor and get advice based on the current market we're in. In a slow market, the seller may be open to a contingency if it's possible that's the only offer they will get.

For more information on Minnesota Real Estate, buying a home, selling a home or investing in Real Estate, please connect with Heidi Herda Realtor, Keller Williams Classic Realty, The Herda Home Team - 612.807.4858 ~ Keller Williams Classic Realty #tipsforsellers #herdahometeam #mymnhomevalue.info @heidihomesearch