Finding a Replacement Property
Answer: That is certainly a common concern of sellers. It can be a concern if you find the new home but haven't sold your existing home yet as well. The transition planning can bring stress to the process so having a plan to get from place A to place B can relieve much of that stress. One way to handle the process is to locate a month-to-month rental or an apartment that you can move into with the bare essentials from your home. That could happen while you are selling or the place you move to after the sale. The balance of your possessions can be moved into storage until you locate your next home. Of course, there is a cost to this strategy as you will be moving twice. The advantage is you would be able to sell your home without any contingency on your part to locate the next home. That brings me to the second strategy. You can sell your home with a contingency that you must find a replacement property so that you can move from your current home into the new home. The disadvantage is the buyer might want to have a sure closing date for their planning purposes and not be willing to wait for you to find your next home. Having a contingency can limit your buyer pool and as a result end up with a lower sales price. If you have relatives in the area, then you could make them a deal to move in for a short time while you find your replacement home and then put all your possessions into storage. Usually that is a last resort sort of solution but it depends on your relationship with the relatives. Some would be thrilled that you are coming to live with them for a period of time. Others, not so much. Actually, it is amazing how often people sell their home and have found the replacement home and both deals close concurrently and the move goes very smooth. When you are buying the new home, you will want it with the contingency that your home sells so that you can buy the new home. In a hot market the sellers are not as likely to accept your offer if there is a contingency for you to sell your existing home first. In a slower market this strategy will often work just fine. Be sure that your home is listed on the MLS when you ask for that contingency as it shows you are serious about selling. Even better if you happen to already be in escrow on the sale of your existing home. Yes, it can be done and the stress can be minimized with a plan. Your agent can help you with the details and give you the assurances that you will end up just fine.
Answer: We have heard that from others including clients and have seen the difficulty that comes with the sell and then buy. It is difficult as you will no doubt need the money out of your home to purchase the next one. The best scenario is buying the next home contingent on the sale of your existing home but that can be difficult as the seller of the home you want to purchase likely has more than one offer and the others may not have any contingency. The seller would be concerned that your buyer may not perform and have the sale fall out, which would mean their sale would also likely fall out and they have lost time in selling their home. It would be imperative that your home be in escrow with a definite close date to have a chance at doing a contingent offer. It would be even better if your sale has had all the contingencies removed by your buyer so that it is apparent that your transaction will close on time. So, the first hurdle is to get the seller to accept your purchase contingent on the sale of your home. You are up against buyers who have “all cash” or 20% down and have no property to sell. I would suggest that you work with an agent that has a lot of listings as they might be able to position you for a home as they can help the seller understand that you are a very qualified buyer. Also, the agent that has been doing significant business for years has a network of other agents who know them and might be willing to work with them as a professional courtesy. In regards to the limited inventory, you have to broaden your requirements and expand your geographic boundaries to give you the best chance to find an acceptable home to move into. Currently there are more buyers than sellers and that means more competition for each home. That is great for the seller but difficult for the buyer. Be ready to pay more than you wanted. It can make sense to buy a home that is larger than you intended but it could mean that you will skip a step in the home buying and selling arena down the road. You could save one move in your life. Today’s advantage in doing that is the prices are on the rise and the interest rates are at historical lows. If you would otherwise have moved in five years, now maybe you don’t move for ten years. You could get a loan at 3.5% interest today and keep it all that time. If the rates moved up to 6% in five years, it would not have any effect on you. If you are willing to do some work on the home that might give you a chance at a home that others will pass by as they are not handy or want to have to upgrade after they purchase. Bottom line is it is more difficult to find a home today but every day people are buying, even with the contingency of selling their home first. Be positive and creative and trust your agent.
Question: I have been looking for a home for a couple of weeks and have been shown several homes that just don’t fit what I want, what advice can you give me?
Answer: When you are working with a Realtor in your home search it is very important to have a written statement of your desires in your next home. A list of your most important needs, such as a certain number of bedrooms, or, a particular location or city, a desire for a pool, close to or within the boundaries of a particular school or school district, and the list could be lengthy but this helps to isolate that perfect home for you. The first meeting with your Realtor is the time to spell out your parameters. Your agent should then discuss these with you to gain an understanding of why each parameter is important so that they may make suggestions that will help define your home search. In a market with low inventory available to the prospective buyer, it is likely that the home that is purchased will not meet all the desires and some compromises may have to be achieved. The need for constant communication is imperative as you visit each home. For instance, you may have said you wanted four bedrooms and you are shown a home with three bedrooms and an office. What you wanted was a home where you could have an office and the fourth bedroom allows for that requirement. You had indicated that you would like a pool and you are shown a home without a pool but it is located in a community that has a community pool. That may satisfy your requirement and you don’t have to maintain the pool. In a market with low inventory you may be shown a home that doesn’t match your criteria but may be a workable home for you and your family and the Realtor feels that you should see that home. Many times the ultimate purchase of the buyer seems different than the original request just because the home may be in excellent condition and they just fall in love with it and are willing to adjust their original thinking. If you are moving into an area from another state, then you may need a tour of a larger area to understand what best fits your needs and then quickly narrow the search. In today’s world many buyers have done extensive research on the internet and have determined exactly where they want to relocate. The better you know what you are looking for, and that information is communicated to the Realtor, the smoother the house hunting will go. Like most things in life, communication is the key.