Now what does a chicken and an egg have to do with real estate?
Well let's talk about 'rightsizing' and "yes" that a new term I've coined when your current home is no longer the right size for your family.
Here's the dilemma; you have to sell your home to secure financing to buy your new home and if you sell your home before you find the next home of your dreams you may be homeless!
I see this dilemma all the time and it comes down to two factors: motivation and market conditions.
Let's share the story of Annie and Joe. Annie and Joe bought their first home seven years ago perfect in size and price for first time home buyers. After adding two beautiful daughters, a dog and cat they are starting to feel the squeeze of space. When I met with Annie and Joe my questions were when do you want to go and where do you want to go. We determined they wanted to time it with the end of school year move and they only want to purchase their next home in one specific community. So I actually had to assess the two markets. The stats for the market they were in combined with the upgrades they had completed in their current home. The conclusion of that assessment was they were in a balanced market and had superior upgrades to any of the homes in their price range currently listed. Because of this we had the staging, photos and tours completed and ready to go with the push of a button.
The community they wanted to move to was more of a seller's market. We had to find and secure a home in the community they wanted and offer with the condition of selling their home. When this condition is added to the purchase contract in a seller's market the property still remains active to buyers and you risk the chance of being bumped by a purchaser with no home to sell.
Strategy - find their home and secure the purchase, list their current home within minutes of entering conditional in their purchase. For Annie and Joe it all worked out. Their home had an offer within hours of being listed, all conditions went smoothly and their happy family are moving in July
Annie and Joe did want to 'rightsize' but they were not willing to risk selling and becoming homeless until their next home was secured.
Sally and Richard purchased their first home five years ago on a very busy suburban street. It was brand new and minutes to the main highway and all the amenities of the area which, at the time was important. Five years later when baby Jane came along it was quite evident that living on this busy through way was not ideal for small children.
We talked about their ideal place for their next move and there was only one school district they wanted to move into.
After meeting it was clear their motivation to sell and get off the busy was more important than finding their next home in the subdivision they wanted and they were willing to rent and wait for the right a house to come available in if they had to.
We put their home on the market, secured a buyer and Sally and Richard rented home with a month to month lease until we found their next home in the specific neighbourhood they wanted.
When I became an empty nester my motivation to leave the suburban neighbourhood I had been in for 25 years outweighed where I was going. My husband and I weren't quite sure if we wanted to build or buy a one level home but we both knew for sure we were ready for a more rural area and one level home. We chose to list our home and make our decision once we secured a buyer for the price we wanted on our current home and then we made a decision to purchase an existing home. Our timeline ended up putting us in a rental for six weeks which we were willing to do because our motivation to sell outweighed where we were going
I realize this motivation can add to the cost of moving twice. Both Sally, Richard, myself and my husband were willing to spend money on two moves rather than rush into purchasing a home that doesn't suit our needs under the duress of having sold my current home.
The most common practice in our market overall is to list the current home while shopping for the next home. The home is purchased conditional on the Sale of Buyers Property (SOBP) and I have seen occasions when this link can involve two or more homes in the chain. I always suggest having a first and second choice, that way if you get bumped from the sale by a buyer that doesn't have a home to sell you've got a plan 'B'.
It can be quite an emotional and stressful process. So what comes first: Sell then buy or Buy (conditional) then Sell?