If you’ve thought about selling your home but are hesitant to take the first step, one or more of these thoughts may have crossed your mind:
- Worried about selling and buying at the same time?
- Are you scared to list your home for sale because you don’t know where you would go if it sells before you find a new home?
- Are you searching for a home but cannot seem to find it?
- Worried about having to move twice?
If you answered yes to any of these questions, then you are one of over a million people across the country right now who feel the same way. From low inventory levels to increasing mortgage rates, the real estate landscape has experienced a multitude of changes and challenges over the last several years, leaving many sellers wondering when the “right” time to list would be given current market conditions.
Since the beginning of the pandemic in March 2020, inventory levels have been decreasing, eventually reaching historically low levels. However, inventory has grown slightly in some states, which means NOW, especially before March, is a great time to list and take advantage of motivated buyers before other sellers start to saturate the market.
The truth is, waiting to research your home selling options means you’re not making progress toward buying your dream home either. If you’re feeling stressed, don’t worry – you have options! In today’s market, planning your move is crucial. It’s essential to explore all possibilities and understand your protections to avoid paying for two mortgages, moving multiple times, selling without a new home lined up, or struggling to find your dream home. But here’s the silver lining: if you start on the right foot, you can navigate this process with confidence.
4 Crucial Steps to Buying and Selling at the Same Time:
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Hire the Right REALTOR®:
- Do your research! Does your REALTOR® have access to ALL the homes for sale including homes that haven’t even been listed yet? This database is out there, and it’s important your agent has access.
- We recommend hiring someone with a lot of industry experience, especially in assisting people selling and buying property at the same time. At Lamacchia Realty, our REALTORS® do this every day!
- Read/watch testimonials from other sell/buy clients and hear their success stories.
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Get Preapproved for a Mortgage:
Most real estate professionals will say the same thing: before you start searching for homes, get preapproved! This is especially important when you’re buying and selling at the same time. While going through the pre-approval process, ask your trusted mortgage broker to calculate what you can afford based on different sale prices for your current home. For instance, if you think your home could sell for $500,000, have them also calculate scenarios for $475,000 and $525,000. This will give you a clear understanding of your buying power no matter what price your home sells for. Your real estate agent can help you determine how much money you’ll make from each sale, so you’ll be ready to strike when you find the right home.
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Get Connected to an MLS Feed:
Another important piece is to get set up with a Multiple Listing Service (MLS) platform. Find a REALTOR® who has easy access to an MLS, and they’ll send you the available homes for sale soon after coming on the market. Searching for a home on websites like Zillow, Trulia, or Realtor.com does not provide the most accurate inventory of homes. They’re a good way to start casually looking, but they won’t be of much help when you’re seriously ready to buy. This is because 10% of homes on the market aren’t even on those sites, and 25% of the homes on those sites aren’t even for sale! You want to have a search tool that is tailored to your criteria, fits your wants and needs, and gives you the best selection of all available homes for sale.
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Be Proactive and Take Action:
What we see quite often, is that “Want-to-Be” sellers and buyers don’t want to take one step without taking the other. However, all this does is hold them back from their goals! Deciding whether to make an offer on a home before listing yours, or vice versa depends on factors like your urgency, the time of year, and your financial situation. This choice can make people anxious, but if your REALTOR® advises you one way or the other, trust their guidance. Taking one step is better than staying stagnant.
Regardless of which way you go, it’s crucial to actively explore homes and narrow down where you want to live. Be sure that you’re fully prepared to strike when the right house comes on the market. At the same time, be proactive and start taking all the necessary steps to list your home for sale. Whether you’re prioritizing buying or selling first, being fully prepared on both fronts is essential!
Protect Yourself as a Seller
Imagine this scenario: Your home went on the market, and since it was priced well and gauged a lot of interest, you already have several offers on it. However, you have yet to find a new home to move into. You don’t want to lose these offers, but you also want to avoid moving before having a place to go.
There are several ways to protect yourself to be sure that you can live in your home until you find the house you want. Below is a list of methods:
- Disclosing in MLS – You can put a disclosure in MLS that says, “Sale Is Subject To Seller Finding Suitable Housing”. This means that the seller will not go through with the sale until they find what they want. Although buyers often frowned upon this practice several years ago, it has become much more acceptable due to the decrease in inventory we’ve been continuing to experience. If a deal was made under these terms, this language would also make its way into the Purchase and Sales agreement.
- Delaying the Closing Date – Another method that gives the seller plenty of time to find a new home is to set the closing date as far out into the future as possible. While the typical timeframe for closing is usually 2-3 months, some agreements stretch as long as 4 months. In the situation that the seller needs more time to find a home, and the buyer is willing to wait, then there is nothing stopping anyone from agreeing to a longer timeframe.
- Rent Back – In recent years, this method has become more and more popular. A rent back comes into play when a seller must sell their current home before being approved to purchase another. Here’s how it works: the buyer and seller close on the home, allowing the seller to receive their proceeds from the sale. However, the seller is allowed to remain in the property for as long as they need until they secure their new home. During this period, the sellers either agree to pay the new owner’s rent, or have the rental fees deducted from the sale price for a predetermined amount of time.
There are additional methods that buyers and sellers can explore when negotiating a deal, and they can be as creative as needed. If both parties are flexible and work together, it significantly streamlines the process, making sales more likely to see success!
Protect Yourself as a Buyer
Now consider another scenario. After searching for a new place for quite some time, you finally find the home of your dreams! Naturally, you want to make an offer on it. However, your current home still isn’t under contract, and you’re unable to qualify for a new mortgage until your current home is sold. Luckily, you can still make an offer on your dream home; you just need to protect yourself. When writing the offer, you would need to make your offer “Subject to The Sale of {CURRENT PROPERTY ADDRESS} Home.” This is called a contingency.
Making an offer with a contingency can present challenges since sellers often view it unfavorably, and understandably so. Put yourself in the seller’s shoes: You receive five offers on your home, and one includes a contingency. Would you want to accept that offer? Probably not, unless it’s the highest bid. As the buyer, you and your REALTOR® must communicate clearly with the listing broker. You must emphasize your intent to list and sell your current home as soon as possible. It may even require showing the listing price and comparable sales in the area to demonstrate its marketability. If the seller does accept the contingent offer, they will likely implement a strict timeline for you to sell your home quickly. Luckily, in today’s competitive market, timely sales are possible if the home is priced correctly. Keep in mind that during the highly competitive late winter and early spring months, this strategy can be a challenge. Just be patient, trust your REALTOR®, and be prepared to put your best foot forward.
Sell without Listing with an “Off Market Sale”
What many sellers might not know is that a home CAN be sold without listing! In doing this, it’s important to understand that the home won’t be exposed to nearly as many buyers as it can be by listing traditionally. However, when you work with a company that does a tremendous amount of marketing and has thousands of buyer clients, it is possible to sell just by exposing it internally among REALTORS® at a company. For some sellers, the biggest benefit of selling off-market is the reduced amount of foot traffic to the home. This is especially attractive to sellers who want a more discreet selling process.
Additionally, buyers are thrilled when they find a home off-market, as they’re less likely to be faced with a bidding war. Because of this, buyers are typically more willing to close on the seller’s timeline, which is extremely beneficial for sellers who haven’t yet found their next home.
Don’t Be a Want-To-Be-Seller in 2024!
After reviewing the information above, you should see that you have the capability to sell your current home and move, all on your timeline! Start by discussing all of your options with a trusted REALTOR®, and work with them to create a plan tailored to you and your specific situation. It’s important to remember that you don’t have to list until you’re ready!
It’s also crucial to understand that as a seller in today’s market, you hold significant leverage. Essentially, if a buyer doesn’t agree to your terms, you have the right to deny their offer. Whether your property is actively listed or not, the decision ultimately rests in your hands. Your home, your choice!