OrganicMama
So in love with my little man!
Member since 6/08 5172 total posts
Name:
Mama
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Buying/selling questions
We are planning to list our home around Feb/March, and I'm wondering how the selling process works when needing to buy another home. We can't afford to carry two mortgages, so buying while our house hasn't sold isn't an option. What are our options, without renting a home while we look?
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Re: Buying/selling questions
You will need to have your current home at least in contract before you put an offer in on another house. Since your ability to purchase a new home is contingent on the sale of your old one, it will make your offer less desirable to a seller. However, the further along you are with the sale, the more reassurance the seller has that you will be able to close the sale of your home and purchase their home. So while at a minimum, you will need to be in contract, some sellers won't even consider your offer unless your buyer has a mortgage commitment, appraisal has been done, and closing is imminent.
Of course, that doesn't leave you much time to find a new home, and even if you were able to find one, it will likely take approximately 60-90 days to close on that house. (If you find a vacant house and work with a quick mortgage lender, you could conceivably close within 30 days of going to contact).
So most people who are planning to sell and then buy wind up either taking a short-term rental in between (which can be hard to find, and expensive, if you need to pay broker's fees and put items in storage) OR stay with family/friends to ease the transition and get more time.
If that's not an option, then you could try to negotiate something with the buyer of your home. For example, you could ask them for an extended closing date (such that you would schedule the anticipated closing date to be 4 months out instead of 2 months). That would give you more time, but it could make your home less desirable for most buyers who usually want to close asap to secure their loan and the best rate (and often need or want to get into a home asap for other reasons).
Another option would be to have a standard closing timeframe, but plan to rent back from the new buyers for a period of time until you can move out and into your new home. But again, probably only a small fraction of buyers would be open to such an arrangement.
I think when selling, especially if you want to get top dollar, it's best to keep your buyer pool as large as possible and have terms that will attract the most buyers.
So if you were my client, I would advise you to seriously consider the rental or staying with family option. You CAN work out other arrangements, but it's rare and can impact your transactions in a negative way. It's much simpler to complete your sale and then be able to house hunt (at your leisure) and make an offer unencumbered by any contingencies.
Hope this helps!
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Re: Buying/selling questions
No problem. If I can help you more as the time to list gets closer, let me know. I would be happy to consult with you, answer more questions, etc.
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