Strategies to buying a new home, while selling your current home
Do you need to sell to buy the new home?
For most sellers this is a yes. You need the funds from your current home’s equity to use as your new down payment of the new homes purchase. There are contingencies in place in a real estate transaction to be able to help you buy a new home, while selling your current home.
Contingency to find home of choice
This is a contingency placed on the sale of your home, that the buyer agrees to, allowing you to find the home you want to buy. If you do not find your “home of choice” then you are not obligated to sell your home to that buyer. This contingency would be for a certain duration of time. This allows you to offer the home for sale, but let the buyers know you still have to find the home to move in to.
The negative of this type of contingency is: How many buyers decided to not write an offer on your property because they don’t want to allow you the time needed to find your home of choice. They decide to pursue another property instead, limiting the amount of buyers willing to write an offer on your home, in turn limiting the amount of money you may be able to get for your home.
The best way to view this is; do you want to negotiate time or price? Since you are asking them to give you extended time, then may not be willing to give you top dollar.
Contingency on the sale of your home
This would be if you found the next home of your dreams, and you want to write an offer on it immediately. Since you need to sell your current home to get the proceeds from it to buy the new home, you would write an offer that is contingent upon the sale of your home.This means just as it sounds, you want to write an offer, but the sale cannot proceed until the sale of your own property is complete.
The negative of this type of contingency would be: The seller of your new dream home has to trust your current home will close without a hitch. It is an extra domino in an already complicated line of lined up dominoes. IF there are other offers on the property, one of which being non-contingent, what seller would pick the offer that is contingent with the added risk?
Strategies to make these types of contingencies work
This isn’t to say that these types of deals can not be negotiated and navigated. These are very normal real estate transactions, but it does take a skilled, experienced agent to be able to walk you through this.
Each case is different however, so the strategy and success is based on many variables.
[gravityform id=”20″ name=”Selling or buying my home contingent strategy “]