Article By Michelle Johnson
The Dilemma: Should I buy first then sell, or sell first then buy?
It’s a seller’s market right now, and that means anyone looking to sell a Oregon home has a lot of options. Obviously, most sellers would love to pull off the perfect swap, buying a new home and selling their present one at the same time. Since you probably realize that is not how it goes 99 times out of 100, here are a few of the pros and cons of your other choices to help you make an informed decision.
Choice 1 – Sell Before You Buy
Many reject this outright for a simple reason: If you close on your Oregon home before making an offer on your replacement home, you are looking at moving twice. The odds are that you will have to be out of your current home before you have somewhere to go, so your things will be in storage. Plus, you will need to find a place to live during the interim. The best way around having to move twice if you choose this option is to work with a Pods-style company to pack everything and have it stored until you are ready to have it delivered at your new home.
Choice 2 – A Tale of Two Mortgages
If you have impeccable credit and more income than you know what to do with, this is another ideal option. You can buy a new home and keep paying on the old one until it sells. Most people have neither the income nor the ability to get two mortgages at once. If you are in that small group, however, this may be a good option for you.
Choice 3 – Price to Sell
You may be able to pull a sort of “sell fast for cash” deal if you are willing to sell your home cheap. This is a bad option if you need to get as much as possible out of the sale of your home. It’s a great option if the home is in some measure of disrepair and you are hoping to sell quickly and “as is.”
Choice 4 – Make Offer “Subject To Selling Your Home”
This is an option that may be tough to convince another seller to swallow, but if you can pull it off, you have a great opportunity. You can include a clause in your offer making it “subject to” selling your current home. This way the seller won’t actually close on the home until your current home sells.
Obviously, the person you are buying from faces a dilemma. If they accept your offer, their home is off the market, but it doesn’t sell until yours does. If your home takes forever to sell, they are stuck waiting. So is this option ever viable? Sure.
You may offer a homeowner a price they just won’t get from anyone else. Depending on the situation, they may be willing to wait. On the other hand, they may be in a situation where they can afford two mortgages and, again, don’t mind waiting as long as you can afford the price they want.
Choice 5 – Make Your Buyer a Counter-Offer
You can always wait until someone makes an offer on your home and then try to insert a “replacement housing”contingency that allows you to stay in the home until you find a property to purchase. That might chase away a buyer who needs to get into a home quickly, but other buyers who have more time might be willing wait while you shop around.
Choice 6 – Go for It!
Maybe you will be the 1 in 100 who finds the perfect buyer and seller at the same time. It has to happen for someone, right? The fact is that you have the option to terminate an offer within the 10 business day inspection period contingency for just about any little reason. If someone makes an offer on your place, make an offer somewhere else, and if they back out you always can find a reason to also. Of course, this is not the most ethical way to proceed, and you certainly wouldn’t want someone to do it to you, right? So let’s consider a better way.
Which Option Is Best?
There are a lot of ways you can go about selling a home and buying a new one. As you can see, some options are better for the seller, and others are more advantageous for the buyer. Choosing the one that is best for you comes down to a few options.
Find out what your lender is willing to do to work with you. This will allow you to see if two mortgages are an option or even if you could get a bridge loan.
Have your agent explain the current state of the market both in the area you are looking to sell and where you want to buy. A seller will have more options in a seller’s market where homes are in demand. Of course, that might make it a little tougher to find a new place in a pinch.
Have a contingency plan. What will you do if you need to live somewhere else for a little while in between homes? What will you do with your household items? Look into short term rentals and extended stay hotels. Hopefully, you won’t use this info, but it’s better safe than sorry.
Shop around before you put your home on the market, seriously consider a rent clause in your sale, and wait until your buyer’s inspection contingency period is satisfied before making an offer.
In the end, the best strategy is to sell first, then buy. This will allow you time to find the “right home” and present your strongest offer. I recommend you get out and look at homes in your desired price range now. Depending on the neighborhood, once you put your home on the market, it may receive an offer quickly. Careful planning can make things go a lot more smoothly. Knowing which place you are going to make an offer on is important to get as close as possible to pulling off the perfectly timed move.
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