With the change of the season comes new sellers entering the market place—but where do they go? If you are considering selling and buying a home you may wonder what it takes to tie two transactions together. I would like to talk about how that works in our current market.
So you are considering selling… Whenever I meet with people who are considering selling their home, my ﬁrst thought is to make sure I understand their motivation. This is especially true if it is their primary residence. It is imperative to ﬁnd out where they want to go and how they plan to get there. I never want to render anyone “homeless”! There are many strategies to successfully tie two escrows together and keep things as seamless as possible but let’s start from the beginning!
Timing is everything right? With homeowners gaining equity in recent years, many people have found that they have the opportunity to make a move. Be it downsizing or upgrading, whatever the situation is, one of the ﬁrst questions I ask is “what are your top three concerns?” For someone who is in a position to sell their home with the hopes of buying another their concern is usually “timing”. This is understandable. My consult usually includes an in depth discussion about their options and what the process looks like. Some might think it will take a miracle to make it happen but, with the proper guidance and all expectations in check, it can be a smooth transition!
Training wheels and ﬁrst steps… After initially meeting with potential sellers, I like to suggest, not only talking with a lender ﬁrst which will take a lot of the guesswork out of the process, but also going out to look at current homes in their price range to hopefully manage their expectations. Most people do not hate the home they live in; in fact, there are usually many aspects of their home that they are afraid to give up. I want to make sure that what they are selling can be replaced by something that excites them! It should check most of their want boxes! This can be tricky so I always encourage them to keep their “eye on their why”. It is easy to lose sight of your motivation when you feel discouraged by low inventory or homes that feel “sub-par” compared to the one you are selling so it is important to go back to the initial reason. Sometimes it is something like wanting to be in a different school district or wanting to be closer to family. I always want to make sure that the trade off is worth it and if we can stave off any disappointments at the get-go, that is ideal!
So you want to sell and avoid being left homeless? As I mentioned, most people are worried about how the timing works. I like to explore the options with potential sellers in this situation all the while being very realistic about the market. There are a few options potential sellers have such as the ones below…
• Make your home sale “contingent upon ﬁnding a suitable replacement home”. Pro: gives some peace of mind that you will not be forced to sell if you can’t ﬁnd what you want. Con: not all buyers are willing to get their heart set on a home that has no certainty of closing and/or they do not want to wait.
• Ask potential buyers for a longer escrow – Pro: gives a little bit of ﬂexibility to your home search. Con: not all buyers are ﬂexible enough for this option
• Ask potential buyers for a rent-back – This is the option that we usually use most. In a perfect world, you will ﬁnd a home right away and we can run the escrows concurrently; either way a rent-back is ideal to allow some overlap and avoid sellers scrambling to get out of their home on time!
• Do a “Double Move” – this is NOT for the faint of heart; however, I love this option because then you do not have to buy a home “under duress”. The two biggest downsides are the effort and the ambiguity of the market and interest rates. Short-term rentals would be best and depending on how you do it, it can be worth it.
Some Quick Tips and Strategies… I know it can be a tough decision to sell your home but I usually recommend listing your home before setting out to buy one. Be it contingent upon ﬁnding a suitable replacement home or what have you, it just puts you as a BUYER in a better position when negotiating with sellers. Finding your replacement home while having your current home in contract is the best case scenario of course but I realize this is not always realistic. Most people want the assurance they can ﬁnd what they want ﬁrst and, because it is a sellers market and inventory is low, it can be a little more difﬁcult. When I represent buyers, I do not want them to be bullied so the better their offering terms, the less likely that will happen! So tying two transactions together is not a mythical unicorn! It can be done and there are options for sellers. Timing is everything and so is good guidance! I am always here to help!