So it's time to buy a new home. Whether the family is growing and you need more space, or the kids are gone and you want to downsize - you have the tricky business of selling your current home before you can buy the next one.
That can be challenging in a 'normal' market, but today's low inventory levels are leaving people fearful of being 'stuck' -- selling a home without having a new place to move in to. Rumors circulate that sellers won't accept offers subject to selling an existing home because they have other offers they can accept. So how can you compete?
First, welcome to the brave new real estate market. Second, you're not alone. Third, you have options.
Let's be honest. There is no silver bullet to solving this dilemma - but there are options. If you take it one step at a time and surround yourself with a knowledgeable support team, risks can be minimized and tricky transitions can be overcome.
Here are 5 important steps to get you in the market.
1. Be prepared. The first step is to contact a trust REALTOR® for a Current Market Analysis (CMA) of your home. The CMA will give you insight on the value of your home, potential expenses, the best timeline as well as a comprehensive overview of the market conditions.
2. Get Your Finances In Order. Contact a trusted lender and obtain a pre-approval letter. Understand the value determined for your home by the REALTOR® and get qualified for a mortgage. Also, find out if a bridge loan or equity loan might be an option. The proper pre- approval or loan program can make you a stronger buyer in the eyes of sellers.
3. Start Your Search. Based on the value of your home and your pre-approval letter, you are ready to start looking at homes. You may be in a position to place your home for sale, subject to you buying a new home. Think of it; if you have your house sold and know what you can afford to buy, then you can go out and make an offer on the home you want because all of your proverbial ducks are in a row.
4. Look at short term rentals. This is not usually a preferred choice, but it may be the best alternative. If you need to sell your home first, it can be difficult to sell, buy and move in on the same day. Also, your new home may need some minor repairs or cosmetic updating before you move in. It's possible the buyer of your home may let you to stay for a short period of time, but it's better to have the safety net in place, just in case. Remember, buyers have been faced with many of the same challenges as you, and they are more likely to be flexible.
5. Look at new construction. Buying new construction can be a great option. Not only are you buying a new home with inherit benefits, you have a more definitive timeframe for selling your current home, thereby making it easier to coordinate the entire process.
- Have your team in place - real estate agent, mortgage broker and attorney.
- Have a CMA prepared for your home.
- Get a pre- approval from a credible lender and know what mortgage is best for you.
- Go out and explore current homes for sale.
- Look at new construction - is it for you?
- Look at short terms rentals in the area.
- Contact a trusted mover and get a quote on moving expenses and storage options.
- Make a detailed assessment of your options.
- Keep your entire team updated so everyone has your goals in mind.
- Selling your home subject to finding a home is a viable option in this market.