In this Sellers Market an important decision that a seller is going to have to make is if they should buy a home first and then sell their home, or if they should sell home and then find a home to buy.

Most home owners need to use the equity from their home in order to close on their next home that they buy. In our current Sellers market, homes are selling for multiple offers and a lot of time the winning offer the one that has zero conditions, no financing or no home to sell. So this puts buyers that have a home to sell in a tough spot.

What used to happen is that a seller would find a home that they liked and put an offer on it conditional on selling their home. The home that they have the offer on would still be able to offer it for sale and if they received another offer they liked, then they would go back to the first buyer and that buyer would have 24 hours to decide whether or not they wanted to waive the condition of the sale of their home or not.

In this current Sellers Market if you are looking to buy a home under $500,000 there is a good chance that no sellers will even accept a conditional offer. If they did the buyer would likely get bumped by another offer shortly after before their home is sold.

So, what do you do then if you need the money from your home to buy another home?

Here are the pros and cons to both options.

Option 1

Sell First, then Buy- Sell your home and try to negotiate a closing date far enough away that you have a good amount of time to find a home you would want to buy.

Pros- You know that you will not be stuck owning two homes. You know you will have the money to close on the second home. Safer

Cons- You may be forced to purchase a home that isn’t your ideal home just because you need to find a home before the house you sold closes.

Ways to mitigate the risk-

1)You have a family member or friend that will allow you to move in for a bit should you not find a place to live right away. Not everyone has this luxury or even wants to explore this option.

2)Push closing date on your home as far away as possible to give yourself more time to browse.

Option 2

Buy A Home, then Sell- Find a house you like, negotiate an accepted offer on it that isn’t conditional on selling your home and again set a closing date far enough that gives you enough time to sell your home.

Pros- You will be moving into a home that you love and not one that you are just moving into because you ran out of options because you were on a deadline.

Cons- You are now under the gun as you are in a position where you need to sell your home fast because you need that equity to purchase the home that you are buying. If you don’t you lose your deposit and potentially will be sued!

Ways to mitigate the risk- The good news for people in this position is that we are in a sellers market! So if your home is priced right then you should not have a problem selling your house. Last week I sent out that infographic that illustrated the impact that price has on the saleability of your home.

You need to hire a competent trust worthy agent who really understands what is going on in the market and can tell you at what price you can expect to sell your home.

A lot of agents will tell you your home is worth more then it is just because they want you to list your house with them. Making the mistake of choosing the wrong agent in this market can be critical. Make sure that you choose an agent with a proven track record.

If you are in a position where you need to sell your home to buy another this year, reply to this email and we can meet up and have a discussion about what approach you are comfortable with and which approach may be best for your situation. Everyone’s situation is different and requires a different approach. I can help you figure out what that is.