Right now, people who want to sell their current home and buy another are in a quandary. The market is hot and residential properties are selling like hot cakes, so sellers are understandably eager to put their properties on the market. However, what should they do if their house is sold and no replacement has been found? As is often the case in life, options have their pros and cons.
It is important to remember that although the current housing market is very hot, it may start to cool by lunchtime. This is the nature of markets. So, if you can take advantage of the current market, know that it could be a time-limited offer. Plus, no matter which option you choose, you may face higher property taxes, even if you’re downsizing. With these truths in mind, here are your opportunities to buy and sell in this hot market.
Option 1: a contingency sale
You can accept an offer to buy your home on the condition that you only sell it after you find a new home. On the positive side, you can use the profits from the sale of your current home as a down payment for your next home, and you will only receive one payment per home at a time. The downside is that buyers may not be as interested in buying under these circumstances, which means they can offer a lower purchase price or simply withdraw from the agreement when they find that the seller is more willing to hand over the keys.
Option 2. Return to rent
Another option is to authorize the sale and then rent the home back from buyers (who are now the owners) until you find another property that suits your needs. On the positive side, buyers benefit from a secure transaction, allowing you to get the most of a dollar for your property. The downside is that you no longer own property in a growing market. Prices may continue to rise during the search period, so the profitability on the sale of your home may decline over time. In addition, buyers will ultimately want to move into their new home.
Option 3: rent elsewhere
Similar to Option 2, if you sell your home and rent another home, you benefit from selling your home in a hot market; however, in addition to the disadvantages noted above, you now have to find a rent, which is no small feat, and you have to pay for the move twice (once from the home you owned and once from the rent to your new home.). Just so you know, Selzer Property Management, one of the largest real estate management companies, has no vacancies right now.
Option 4: surfing on the couch and / or sitting at home
Instead of selling your home and renting it out to an unknown third party, you might consider getting family or friends to stay with them or stay at home until you find a new home. Imagine that you are over 20 again and that being in someone else’s bedroom does not cause much inconvenience to you or to them. The upside is that you have a place to stay while you’re looking for a new home without the high price tag or deadline to leave. The downside is that your relationship can get strained.
Option 5. Buy Before Selling
While I understand that this is not always possible, it may be a better idea to buy a new home before you sell your current home. If you can afford the down payment and double the monthly payment, buying a new home solves many of the problems mentioned above in the first place. The advantages of buying over selling include only moving once, finding a new home before prices rise, and not having to include contingencies in the sales contract for your current home. The downsides are mostly financial – owning two houses is expensive. And there is no guarantee that your current home will sell for the price you expect. Be sure to negotiate prices with your realtor before buying a new home, which is dependent on getting a certain price for your old one.
If you have any questions about property management or real estate, please contact me at firstname.lastname@example.org or call (707) 462-4000. If you have an idea for a future column, please share it with me and if I use it, I will send you a $ 25 gift certificate to Schat’s Bakery. To view previous articles, visit www.selzerrealty.com and click “How’s the Market”.
Dick Seltzer is a real estate broker who has been in the business for over 45 years.