There is no requirement, legal or otherwise, to find the next home before selling the current one. Selling first is wise in many situations. First, you’ll avoid making a contingent offer on a home – something that many home sellers won’t entertain in an overheated market.
A contingent is a condition. It’s like telling a seller that “Yes, I’ll buy your home, but only under this condition.” In your case, the condition would be that your current home sells in time to close on the one you are purchasing.
Additionally, selling first eliminates the possibility of owning and making payments on two homes every month. The lender will consider those two monthly payments, and they will most likely ding your debt-to-income ratio.
One of the most attractive benefits of selling your home before buying another is that you’ll be able to relax during the house hunt. With the pressure off, you won’t feel rushed and end up making compromises you wouldn’t otherwise entertain.
Yes, there are downsides, the biggest of which is the possibility of having to arrange for temporary living arrangements until you close on the new home.
The steps you’ll need to take
The first and most crucial step is that we meet in person to discuss our strategy for our clients who are in your particular situation. We’ll also help you determine a competitive listing price for your current home and go over the details about what you need to do to get it ready for the market.
Even if your financial options are limited, we can help you sell the current home and find the new one simultaneously.
Should we find your dream home before the home sells, we always suggest that you make an offer. Yes, the offer will be contingent on your home selling. But we believe that, rather than assume the seller won’t entertain your offer; it’s better to get into the conversation. That is something we are very good at.
We will discuss your options for what to do if the home does or doesn’t sell before you close on the new home. In the end, it all comes down to effectively communicating to the sellers how the scenario might be to their benefit. The key to making this work, in fact, is sound communication skills and a competent negotiating strategy. This is our wheel house and you can rely on us to help you through this process with ease.