This is one of the most common questions we get from our clients. How can someone who already owns a house buy a new home when they can only purchase with the proceeds of their sale?
In this very active Spring Market, many people make this their time to either upgrade or downsize their homes. It is a common perception that the current house has to sell, then they would seek temporary housing while shopping for the new home. While this could be a strategy, many feel that all of the moving is a hassle–not to mention possible storage fees that could incurred during the in-between period and extra moving fees.
The request from most people that need to sell in order to buy, is they want to immediately start to look for their new home. The issue that usually arises from doing this first, is the dream house is found, but without the current property on the market or under contract, most sellers will not accept an offer with the buyer having a home sale contingency.
Our suggestion is to begin to prepare the current house for sale and put it on the market before beginning the new home search. A prime position to be in is to have the current property under contract and then submit an offer on the new house. In this instance, many unknowns are answered, i.e. the sales price and proceeds from the current house and closing dates. These help the buyers to understand how much money they will have to work with to make the new purchase and the definite time frame will put the seller’s mind at ease.
When we market a property for sale and our client needs to coincide closings, we always market the property “subject to owner’s firm relocation.” This makes the new buyers aware a new house must be found in order to complete the transaction. Speaking with an attorney to have this condition become a contingency in the contract is what we always advise our sellers. That way should something fall through on the new purchase, this contingency provides possible protection should the current transaction have to be delayed or even cancelled.
Making a move is typically always stressful but working with professionals that understand the needs of people in various situations will always help to make it a smooth transition.