By Stephen McCarthy
Making a move to a new home is challenging.
Most people plan to use the proceeds from their current home in order to buy their next home. But this is tricky because you need to move out of your current home, close on the current home, close on the new home and then move into the new home.
Here are 4 options you might consider when planning your move.
1st Option - You might make an offer subject to the sale of your current home. This would make your offer contingent on the sale of your current home. In a highly competitive market most sellers will be very reluctant to accept an offer with a sale contingency. They will be worried about whether your property will actually sell.
So if this is your plan make sure your own home is ready to sell.
Once you get a signed offer on the new place put your current home up for sale. Typically the Seller will ask for a time limit on your sale contingency so be ready to move quickly and price correctly.
Remember if your offer with a sale contingency has been accepted you would still need to have funds available for the down payment on the new place. If you do not have enough savings you might consider creating an equity line to help finance the new place.
If all goes according to plan you will close on your current home and then use the funds to close on the new place. You could do it all the same day but that creates a lot of stress for all parties involved. So it is best if you have a day or two between closings.
Of course you will need to coordinate the move out and move in process. So your stuff might need to be on moving trucks for a few days. And you will need a place to stay between closings.
2nd Option - Sell your current home 1st. Now you need to think about where you will go until you find the new place. Maybe you can move in with family or rent a place. Now you have your funds available and are ready to close. You are a much stronger buyer than anyone that requires a sale contingency. Another positive is you know exactly how much money you have to put down on the new home.
On the downside you will be moving twice and have added rental costs.
3rd Option - Sell your current home with a Use and Occupancy Agreement. The buyer agrees to a specified period of time you may remain in your property after the closing. Might be a few days or a few months. The buyer and seller need to agree. Now the clock is ticking for you to find your new home. This will be stressful.
However with your current home under agreement you might have a better chance of getting your offer accepted with a sale contingency. Each step along the process of selling your current home the transaction becomes more reliable therefore you become a stronger buyer.
So when you make an offer on the new home you can assure the Seller of where you are in the sale process. Listed for Sale? Signed Offer? Home Inspection done? P and S signed?, etc Seller’s will be more receptive to your offer depending on the status of your current property.
When you sell 1st it can be very stressful because you might be accepting an offer without really knowing where you are going to be able to buy. So make sure you understand the marketplace of where you are going to move before agreeing to sell your home.
4th Option - You might want to utilize a program like Raveis Purchase which is designed to help people bridge the financing from one home to the new home. Make sure you understand the fees and costs related to using bridge financing.
The key in the current market is to be prepared and to be open minded. As you consider your real estate options to sell and buy you can devise a plan to make it all happen.
When you are ready please contact me to discuss what options might work best for you.
