Planning to Sell Your Home?
Where Are You Going to Go?
There’s a lot to think about if you are planning to sell your Carlsbad home. This is true whether you are an experienced seller, or selling for the first time.
Let’s start off with an important and practical question if you are planning to sell. Where will you go?
SOME KEY QUESTIONS TO CONSIDER
Of course this has always been an important question for home sellers to consider, and plan around.
Do you plan to buy a replacement home, and if so when?
Are you planning to relocate somewhere else?
Do you plan to rent?
Do you already have another home you can move to?
Are you moving in with someone else, e.g., a friend or family member?
Because of the housing market conditions this becomes a much more complicated issue, depending on your personal situation. The reason? Homes are selling quickly these days, in general.
For example, in Carlsbad for February 2022 the average time on the market (DOM) was only 13 days. Furthermore, 56% of the homes went pending in 1 week or less.
The bottom line is homes are selling very quickly, often within a few days after hitting the market, and in more cases than not over the list price…that’s good news for sellers. However, that means you will need to vacate your home fairly soon after you list it, since the buyer will likely want to take possession after closing, unless other arrangements are made.
The answers to the question “where will you go?” can depend on personal desire, what can be negotiated with your buyer, and your financial situation.
If you can afford to buy another home without selling, or closing on your sale, that provides you with some flexibility. Keep in mind, however, that as a buyer you, too, have to deal with the limited supply, high buyer demand and competition. However, most people cannot afford to do this. You should of course check with your lender to see if this is a possibility for you.
If you have another place where you can move that makes life easier - family, friends, a rental you own, a second or vacation home, etc.
But if you must close on your current home in order to buy a new place it becomes much more challenging.
Sellers often ask if they can make an offer on a new home contingent on selling their home. In a less competitive market this was often feasible.
However, quite honestly that’s pretty tough to do these days because of the competition. An offer that is contingent is not nearly as competitive as an offer where the buyer doesn’t have to sell. Or already has done so. It’s possible, depending on the offers submitted and the other seller’s personal situation, but you certainly can’t depend on it as a solution to your dilemma.
Timing the closing of your home and buying another, because of the competition, can be pretty tricky. This is especially true in certain price points, and depending on your particular housing market.
One possible solution seen more often in this market is a rent-back (may be called something different in your area). This is when the buyer and seller agree the seller can remain as a tenant after closing for an agreed-upon period of time.
The time frame can vary but typically is less than 60 days where the buyer has a loan. Terms and conditions for the rental (e.g., utilities; other fees, if any) are negotiated between the parties. It can work for some buyers to delay possession, but not all. They may, themselves, need a place to move right away.
It’s still important to have a contingency plan, however. What if you cannot find a home to buy during that rent-back period, or your offers are not successful? You will still have to move out per the contractual agreement.
Keep in mind rent-backs can vary by market and jurisdiction, so be sure to discuss the possibilities, paperwork and contractual terms, and the pros and cons, with your listing agent as you get started with your plans to sell.
As you start planning for the sale of your home here are some useful resources:
Spring 2022 Home Seller Guide (click to download)
Home Selling Tips and Advice (video series on my YouTube Channel)
More importantly, how about a pre-listing discussion about your concerns, plans. personal situation, and timing? Please reach out to me at (760) 840-1360 if I can be of assistance.