The ideal situation is to be able to buy your new home, without having to sell your existing home. That you means, you either have the cash to buy the second home, or the financial qualifications to obtain a bank loan.
However, most people are not in such a position. Fortunately, you can insert a simple legal clause in the sale of your home, that will minimize your anxiety levels when selling and simultaneously buying your next residence.
When undertaking back-to-back transactions of selling and then buying real estate, timing is everything. The critical factor is to prepare and complete as many tasks as possible, up front, before signing those legal contracts to transfer ownership from one person to another.
Buying in a Seller’s Market
In a seller's market that we have today, it is easier to sell, than to buy. Spokane has been at historic low levels of inventory for over two years now, as of this writing. Buyers have a lot of competition, because there are not enough available homes for sale. Multiple offers are very common. It is not unusual for a typical buyer to submit several offers (between 6-12 or more), before they eventually get one accepted.
It is very, very crucial for a serious buyer to immediately jump on the opportunity, when a matching home comes on the market. The homebuyer increases their chances of getting their offer accepted under the following conditions:
1. Cash purchase. If not possible, obtain a pre-approved letter from a reputable lender (not necessarily a big bank, but a lender with a track record of closing quickly).
2. Minimize or eliminate contingencies
3. Be ready to close sooner rather than later.
Selling in a Seller’s Market
To get this point, the current homeowner should undertake the following steps:
Prepare their home for sale by getting a pre-inspection done, and fixing obvious repairs. Have it beautifully staged, so that it can be promoted heavily to as many target buyers as possible.
After the the property is listed, and it is priced correctly, multiple offers would be received. Accept the best one, and obtain the second best offer as a backup. (Taking several backups, if applicable, is also a good thing.)
Here is the key: accept those offers, but modify them to include a “home purchase” contingency. In other words, the sale of the current home is contingent (or dependent) on the purchase of a new home. If the seller is not able to find a new place, then the deal to sell the current house is off. Note: there are many legal variations and ramifications of this clause, so please consult with an experienced real estate broker or attorney).
Once you have a sale contract in hand about the sale of your own home, you can be very confident, and include that in every purchase offer you submit. This will significantly increase your chances in winning against other buyers in a multiple offer situation.
A simultaneous sell and buy situation is very time sensitive, and it would be best for the homeowner to obtain help from an experienced professional.