Successful Strategies for you to Sell First, Then Buy

This five-part series is a “how-to” guide for finding your next home while selling your current one. Whether it’s your first time moving up or you’ve done it before, we hope 4 Easy Steps for Buying and Selling at the Same Time is a great resource!

Before we dive in, make sure you’ve read last week’s blog post, The Big Question: Are you Going to Buy First or Sell First?. That way you’ll know which action to take first — sell or buy your current home. 

At this point in the series, you should know your criteria for your next home, your budget, and the neighborhood you’d like to focus on for your home search.

Let’s get started

The pitfalls of a conditional home sale contingency

When selling your home first, one of the first things you can do is to determine if you want to have a “conditional home sale contingency.”

This means that when you put an offer on a new home, you’ll add a contingency to the offer that states that you need to sell your current home first in order to purchase the new home.

In neighborhoods where the real estate market is strong, very few sellers will agree to this. They’ll likely have other, more attractive offers to consider. And even if they do accept your offer, they will likely be less negotiable on other terms, such as price. 

So, unless you are buying in a very depressed market, avoid a “sale of home contingency” at all costs.

However, if this is a nonnegotiable, you’ll need to have your current home 100% ready to put on the market. Then you can include in your new home offer a “sale of home contingency.”

Selling your home without a contingency

The three steps below will help you sell your house first and then buy your dream home — without a contingency.

1). It’s time to house-hunt…not house-buy

Before you sell your home, you need to know where you want to end up.

Start looking for a home now, but know you cannot buy yet. The reason to start looking now is to make sure that what you want is attainable, realistic, and achievable. You’re deciding where and what you’re buying and how much you’ll pay. Once you get a sense of the homes that fit your criteria, you can move on to step two.

2). Timing everything just right

Now that you know where you’ll end up, you need to know how often homes come up for sale in that neighborhood and at your price point. 

We can send you a list of homes sold in the last year, reflecting the pace of sales and likelihood of a house becoming available on your timeline.

It’s important to work with an agent now to determine what’s best for the neighborhood you’re buying in and the one you’re selling in. We recommend starting this process about a year out from when you want to move.

3). Focus on selling your current home

It’s time to turn your attention to your current home and get it in show-shape. Remember, your ultimate goal is to move to a new home that is better suited for you and your family. Be willing to do what you can to sell your current home promptly without shortchanging yourself.

Selling your home

Congratulations! You’ve sold your home and are now ready to purchase a new home. Hopefully, you’ve found flexible buyers who are willing to work with you on next steps.

Here are a couple of options to give you a time buffer for finding and closing on a new home:

1). Rent back your old home after the closing

The buyers of your home may agree with this if they really want your house and have flexibility themselves. This gives you time to find a home, close and move during the next one to two months. Because you’ve done all your homework, you already know what neighborhood to focus on. If there is not already a home on the market perfect for you, your agent can also reach out to homeowners in that area to see if they’d be interested in listing.

With a rent-back, you already have your funds from the sale of your home. You don’t have new house debt, so your lender can approve you for the purchase of your new home without a sale of home contingency. Most rent-backs can’t last longer than 60 days from the settlement of your previous home because of owner-occupancy rules and regulations. Do not put an offer in on a new home until your old home has sold and you have cash in hand. You never know what could happen when your home is under contract — it’s not over until it’s over!

2). Find a place to stay between homes

If you run out of time or have no other immediate housing options, you can always put your belongings in storage and find a short-term rental. Buying a new home is a long-term decision. Being inconvenienced for a few months might be worth it to get the perfect next house.

Of course timing and planning plays a huge role in making sure the steps above go on without a hitch. Contrary to popular belief, the time to talk to put together a plan is months, even a year, before you want to move if possible. The more time before you are ready to take action, the better!

Reach out to us to schedule a meeting so we can put together a plan based on when you want to be in your next home. We’ll work backwards to make it happen. 

Next week is our final installment in this series. We’ll show you what you need to do to buy your next home first and then sell your current one.