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If you've decided to move, you've probably been searching for new properties. Whether you started by scouring the Internet, browsing through the real estate pages of your newspaper, dropping by open houses, or a combination of all three, what do you do when you find the "perfect" house, but your home has not yet sold? This is a very common dilemma.
Purchasing a home is a huge financial investment, and the decision shouldn't be made with unreasonable expectations in place. However, this is often the case when the desire to obtain the "perfect" house overrides the planning and implementation of selling the current home. If you have decided you absolutely must have this new home, and need to sell your existing home first, there are a few things you should consider.
It can often take months, to sell a house. The preparation of selling your house is critical to obtaining the best possible market price. When this preparation is not properly taken into consideration, you may find yourself exchanging time for money. Taking time in the beginning can equal more equity in your pocket later.
Be realistic and don't overextend yourself financially. Know beforehand the amount you can afford for the new home, by ascertaining what the current market dictates. Setting a realistic price will speed up the sales process, allowing you to move forward with the purchase of your new home. Buying the new home first may necessitate reducing your price to obtain a quick sale.
So what's a homeowner to do?
Current Home Equity ~
If finances allow, you may be able to take the equity (a bridge loan) from your current home in order to purchase the new home. This allows you some room if your home doesn't sell before the closing of the new property. While you may have two mortgage payments for a few months, this avenue could potentially save you money, time, and stress. Before going this route, determine the market value, estimated expenses, and the timeframe to sell your current home. Talk to your Realtor, lender, and tax advisor to see if this option works for you.
Contingent Contracts ~
Submitting a contingent contract on your new home is a good option. The contingency allows a certain amount of time for you to sell your current home. While such a contract is acceptable, the contingent offer often loses some negotiability. Items which may have been negotiable, may be considered less favorable when attached to a contingency
Should your dream home receive another offer, you may be asked to remove the contingency, whether you've sold your home or not. Additionally, with the contingency removed, you are contractually obligated to buy the new property, regardless of the sale of your current home. Once this happens, any earnest deposit becomes non-refundable.
Your Options ~
Be prepared and willing to walk away from any deal where the conditions are not favorable. As a seller and a buyer, the last thing you should do is put yourself at risk on both ends.
Have a backup plan. This could include arranging alternate living accommodations for a few weeks. Be flexible, talk to your relatives or look into a temporary rent situation.
Above all, keep your emotions out of the equation. Easier said than done, but you'll thank yourself for it, and the entire process will be that much less stressful.
Looking for a new home is exciting! Just be sure to educate yourself as much as possible before making any final decisions. Talking with a Realtor will fill in any blanks you have, plus, they will share with you other information that can help you throughout your home selling and buying process.
Tips for Preparing Your Home to Sell: First impressions are the most powerful sales tools. Emotion plays a tremendous part in creating an interest in your home from a potential buyer.
Maximize Your Investment: You've decided to sell your home and know you have to do some things to get it ready for the market. Where's the best place to start and what repairs will return the maximum amount? I'm glad you asked!
Staging Above the Competition: With the influx of homes on the market, many in builder subdivisions, it is hard to distinguish the value one home represents over another; so many homes are passed by.
Marketing: There is no secret to marketing homes in the real estate industry. Every Realtor® has access to the same programs, websites, online platforms, and advertising outlets.
Home Feedback System: Our team utilizes the benefits of Centralized Showing Service for feedback. This automated system is just one of the ways we keep you informed during the process of selling your home.
Why Didn't My Home Sell?: If your home didn't sell during the original listing period, you're probably wondering why. There are five main reasons a home doesn't sell within the contractual term of a listing agreement.
Should You Sell Short Sale? When there are no alternatives left for refinacing or having your loan modified, a short sale provides the homeowner an opportunity to sell their home for less than what is owed on their home.
Moving Checklist : Logical tips for a smooth move.
Real Estate Glossary: Real estate terms and definitions.