One question I get all the time is, “How do you sell your home to buy another?” When it comes to selling a home in order to buy another, you have a few options on the table.
The first and best option is actually to buy your new property without selling your old one at all.
If you can afford to do this, it puts you in a position of power where you can take your time searching through listings until you find the best property for you. At that point, you’ll be able to write a non-contingent offer, get it accepted, and close it.
That way you’ll be able to move all of your personal property into the new home before you then put your old home up on the market.
While this is the best case scenario, it isn’t something that is feasible for everyone. Many people will be unable to use this option, but that’s OK. If you’re among that group of people who need to sell in order to buy, I’d like to share a couple more options.
First off, I want to tell you Mike’s story. Mike was a client whose Upland property we listed and sold without contingencies because he was willing to temporarily move into a rental property while he continues his home search. Because of his flexibility, when Mike does find the right home he will be able to write a non-contingent offer since he has all the money from his previous sale.
The fewer contingencies you have, whether they are for loan, appraisal, or physical, the closer you are to what I like to call a “position of power.” There are exceptions to this, though. I was once the listing agent on a property in Hastings Ranch. In this instance, the best offer had a contingency stating they needed to sell their current property before closing on the one I was working with.
After running the numbers and examining their current property, I predicted that this wouldn’t be a problem. They had a great home that I knew would get off the market quickly, and I was right. Their home sold within 10 days with multiple offers, and they were able to fund my client’s listing with the money they made.
This can work great for some people. But, another similar option that might work well for some others is to put your home on the market now, but with any offer you accept, have a contingency upon your finding a replacement property.
It’s important to consider timing with this option, though. Unless we are in a strong seller’s market where demand is high, you could see that buyers might be hesitant to wait around on your contingency.
But, whichever option works best for you, one strategy that could be beneficial during your transition is having a rent-back. A rent-back is when you sell your current residence, you become a tenant for, most commonly, less than 29 days while you wait for the close of escrow.
This will allow your money to sit in the bank as one escrow transfers to the other, and will also let you work on your new home before you move in.
Hopefully I’ve covered some of the things that might work for you. But, every situation is different, and I personally love helping people figure out the best game plan for them.
If you’d like any other information or have any other questions, be sure to give me a call or send me an email. I look forward to hearing from you soon.