Developing a Buying and Selling Strategic Plan
How are you going to execute your next move? In the 1990’s and between 2008 and 2012, it was very clear that the most prudent strategy was to sell first and then buy your next home. After all, it takes time to sell and once sold you know your cash position. It also places you in the power position to best negotiate and purchase your next property. But as we found in 2004 through 2007, and we are now seeing again today, selling first is a scary proposition as there are few homes to choose from and most of us would like to know where we are going before we give up what we have.
So what is the best strategy that will allow you to achieve your goals and sleep at night? Below, I have outlined several strategies on the surface, but in order to best determine your next move, there is far more that goes into the plan and it is best to consult your Eleete Realtor. Here are the strategies:
Buy First, Sell Second
For those who are fortunate to have the cash and or the borrowing power, buying first and selling second is once again becoming the strategy of choice. This said, not everyone likes this method which led to thousands of homeowners left with two homes during the financial collapse of 2008. If you are financially conservative by nature, this approach will likely keep you awake at night.
Contingent Offers (Offers upon the sale of your home)
On the other hand, buying your next home contingent upon the sale of your current home is a viable solution if you can find a seller willing to put their eggs in your basket. However, in this now competitive market with multiple offers, the only sellers who would consider such an offer is the seller who has been on the market for an extended period of time and is realizing that you may be their best option to sell. Contingent offers do have some unwanted baggage in two respects; first, buyers typically pay a premium to get the seller to consider the offer, and second, sellers are typically allowed to keep their home on the market for sale until such time that you have secured a buyer for your home. If a new buyer comes along, the seller can provide you with notice to either remove your contingency or cancel the sale.
Secure a Home With a Delayed Closing
Another strategy to acquire the home you want today is to propose an extended closing and to attract a seller to consider such an offer, is typically achieved by offering a substantial non-refundable earnest money. If your offer is accepted, this will then allow you the time to get your present home sold and do so knowing that the home is formally off of the market.
Sell Your Home Subject To You Finding a Replacement Property
With housing inventories low, and buyer activity back at a robust level, you may be able to secure a buyer who will commit to buying your home at a future date once you find your next home. This strategy would allow you to then make your offer on the next home without it being contingent on the sale of your home, without risking your earnest money, and without the risk of owning two homes for an extended period of time.
Sell First, Buy Second
As the most commonly known strategy, the downside to this plan is that many owners are not prepared to give up their home until such time they have a known future home. When housing inventories are ample, most existing homeowners are not as concerned with what they will find as there are plenty of choices. However, today, it is very likely that you will be unable to quickly secure a home to purchase in a timely fashion and afford you the luxury of a single move. If you proceed in this method, it is best to just plan on making a double move and know that you will likely have to find interim housing.
No matter which strategy you choose, give your Eleete Real Estate Broker a call to help guide you through the process to achieve your goals.