You have a very good answer here but you also need to think about the emotional aspect that it would have on you. Once you look and you find the house that you want to buy it makes it very difficult to lose if your home does not sell. There are many homes available all over the country. The entire country as well as many other countries right now are going through the same correction. Unless you have enough money to carry 2 homes for an unknown amount of time you should not even consider buying before you sell. There will be many homes for you to choose from once you have a solid contract on yours. I have had MANY clients that would not listen to the advice and went ahead a purchased another home because it was a deal they could not refuse or they just had to have that home. Now they are carrying 2 homes and strugling. I have also had clients that purchased another home with a 72 first right of refusal clause. Some have worked out and now live in their dream home but for others that it did not work out it was heartache. Dissapointment - stress - etc. Be patient and wait. Your house will sell and you will buy something you love. Hopefully in that order!
Best of Luck,
Linda J Sears
Even if your pockets are deep enough to carry two mortgages or fortunate enough that your current home is free and clear, it is a decided advantage to know exactly what you are going to net out of the current home. Deborah is 1000% correct in that double moving is no fun, but it sure beats the possible financial catastrophe of putting yourself in a position where double payments are eating you up and you have to dump the house at a fire sale price. I have clients right now that purchased a new home before I met them. Only then did they locate me (as an agent that actively works the neighborhood they moved from) to sell the existing house. Unfortunately, it is on a very busy street and has dated decor. With double payments flying out the door, funds to do the necessary cosmetic improvements are nonexistant. Thus, the only way to make the property more attractive is through price. Unfortunately, the new house was purchased with an expected "x" dollar net. I had the bad luck of being the voice of objectivity in terms of what the market would bear for the home. My rosiest outlook was well below what they had budgeted, so they are now in a tight spot even if the home sells. We are in a slow market, and the best listings are taking some time to sell. The difficult properties are challenging to sell at all, at any price. So even if you make the gamble and decide to purchase first, always, always, always consult your Realtor prior to putting the wheels in motion!
Even when you get an offer, your buyer will know that you have another property and use that leverage against you in negotiations.
Definitely, sell first.
Several years ago we were looking at houses or deciding to put an addition on ours. We didn't find what we wanted so we moved forward with the addition idea. We met with several architects and decided on one. Just as we were writing the deposit check, our Realtor called and said, "I found YOUR home." She was right. The minute I stepped through the doorway, I said we'll take it (not your best negotiating tactic). We offered above asking price with a home sale contingency with a 72 hour clause. They accepted a lower offer with no contingency. A month later, the buyers backed out and there was another bidding war with 5 buyers. This time we made an offer without the home sale contingency and got the home at $15,000 more than our first contingent offer. It was still a great price but we could have saved that money and more if we had already sold our home when the house first went on the market.
In order to sell our home, we had to fix up the room that we were about to tear off for the addition. This took time but we could afford the two payments for a while. Fixing it up took longer than expected and we put our house on the market at the worst possible time. By the time we had a buyer six months later, I was so stressed out and financially strapped that I never enjoyed moving into my dream home. We have lived here for (I don't even know how long) about 4 years and still have never had our "house warming party."
We did very well financially on buying the new house but took a huge hit on selling our old one. Today, because we did so well in buying, we had enough money to invest in rehabbing a similar home. Once again, I am paying two mortgages for 6 months LONGER than I expected. The stress and financial burden is so great that I might have to sell MY dream home because of some errors when we listed the other home for sale.
Life is too short and too unpredictable to put up with the emotional and financial stress of buying first and then selling. You will do so much better financially by selling first, that if you don't happen to find your dream home during your escrow period, you can afford to take a nice long cruise or live in a plush resort for a while. Don't even think about the dreaded, "I don't want to move twice." Think about the freedom of what you could do with the money from a 10% higher sales price, a 10% lower purchase price, 6 to 12 months worth of an additional unnecessary mortgage payment and attorney fees when the stress causes a divorce.
I think one of the greatest solutions to "being homeless" is the PODS storage system. http://www.pods.com/ I have never used them but it sure sounds perfect compared to renting a storage space and paying for movers twice. It also sounds like a good safeguard for delayed or canceled closings, too.
Sarah, please let me live vicariously through you. Sell your home first so you can enjoy your next one.
It was still stressful, living in a rented house less costly than our usual house, but the cash flow worked, and my dad's bargaining position was strong on both ends of the deal. He was very smart in business, so I vote with him.
However in a market like the current one you might consider selling your home and renting for 6 months in the city where you want to move. It may mean moving twice but it can also be a benefit when you are moving to a new location to check out neighborhoods and decide which is the best place for your family.
Absolutely! A contract is negotiable. That includes negotiating the closing date. You may want to write an addendum that you need a 90 closing with the option to close sooner upon securing a contract to purchase a suitable home in KS. That is just 1 suggestion on how to handle the closing. But again, closing date is a very negotiated item! Make sure when you receive a contract on the sale of your home that the contract is SOLID! Meaning that if it has any contingencies that they are cleared up before you purchase a home. If there is a financing contingency make sure thay have a committment letter from the lender, if it is contingent on the sale of their home make sure their house has a contract, contingent on inspecitons have the inspeciton done first, etc. Keep yourself out of trouble in this market at all costs.
Hope this helps.
Just remember to relax - it will all work out. Don't rush it.
You should then look at your finances and see 1. if you can afford to purchase something new (you have the downpayment) without selling and 2. that you can carry both houses for at least the absorption rate time frame--up to 18 months in some parts of the country.
There are other considerations: you could rent the house you leave, but you will have to maintain it either way. That's costly, too.
If you want to purchase, but are concerned about your finances, I would recommend you have a home-sale contingency clause in your contract with a 72 hour kick-out clause. That way the seller of the house you are buying, knows he has a buyer at some point, but can accept an offer from others who don't have a home sale contingency. So he is covered--he will sell to you or the other buyer. You get to hold contract on the house you want, but if another buyer comes in you have to remove your contingency clause within 72 hours, or you lose the house. It can be a win/win situation. That's the way we do it in NJ. Check with a local realtor to see if it's acceptable in your area.