The #1 most important strategy to buy a new home when you HAVE to sell!
You are not alone. Most sellers who need more space or are looking to downsize will want to use the equity from their current home as the down payment on the new house. In order to do that you need to close on that property prior to closing on the new property. In some cases, the bank may even require this as a contingency to your loan.
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In a market with limited inventory I’m sure you are wondering how you go about selling without leaving a time gap that may leave your family without a place to live. Naturally, your first thought is to find the house you want to purchase and once you secure that contract then put your home on the market to sell. With more qualified buyers in the market than ever before, you may end up competing for the best terms and conditions as well as best price when submitting that offer. Having a home sale contingency tied to the offer without the home being under agreement (or active on MLS) can be an added risk many sellers do not want to take and if a better option (such as, buyers without that contingency) was available to them, they may opt to go with that one instead.
SO – What do you do?
Related Article: Buying In A Sellers Market
If you have to sell your current home in order to buy a new home, you should list the home and get an accept agreement under contract before searching for that new home. You can add a “Suitable housing contingency” to your listing and offer contract when received. The buyer of your home will be screened for flexibility in closing dates and understand that this sale must allow you the time you need to secure a new home. Most buyers will require deadlines but most of them are between 30-60 days which will hopefully be sufficient in finding your new home. If it is not, you can reimburse the buyer their deposits and move forward to find a more flexible buyer or remove your home from the market completely.
Once you are under contract on your own home, you can confidently move forward with making offers on your future home.
Tip: Some agents will leave out the information on your home sale, in order to get you an accepted offer on your future home as a strategy to lock down that purchase. Your offer and Purchase and Sales (P&S) deposits will be fully at risk if you do this. Do not take this risk if you are not financially able to lose significant deposits. Be open and honest that way all transactions will flow smoothly to closing.
For more information on how to feel confident transitioning to a new home you should always contact a PRO. Be sure to JustCallThePros at 508-320-3279 for a personalized consultation and Kelly Provost will walk you step by step through the process.