Financing in Oakton>Question Details

Jennifer Han…, Both Buyer and Seller in Fairfax, VA

Timing of buying and selling

Asked by Jennifer Hancock, Fairfax, VA Wed Jan 21, 2009

We are preparing to move houses this summer, and are unsure how to best handle the timing. Timing wise, is it best o find our dream home and then hope to quickly sell our current home, or should we sell our current home and hope to find a new home before we have to move? We are not under an external deadline, we just want to move to another school district.

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In a buyers market like we have in Northern Virginia, people who are looking to sell their current home and purchase another have a tough choice to make. Should they sell their current home, or purchase their next home first? There is no one-size-fits-all answer, but here are a couple of scenarios to consider:

A. Sell Home 1, Then Buy Home 2: In this market, you have a lot of control over the purchase of your home. If you sell Home 1 you will know exactly what you have to work with financially as you approach the purchase of Home 2. You will also get a better price on both homes. That is because you will not be under any pressure to sell Home 1, therefore you will not be tempted to jump at a low offer. You will get a better price on Home 2 because you will be working with a definite timetable, and will not need to make your offer contingent on the sale of your home. A seller who has to deal with a sale-of-home contingency will, almost by definition, expect more money for the sale of their home. Sellers look for two things when they are selling their home: top dollar and security in the sale. Which would you rather give them?

B. Buy Home 2, Then Sell Home 1: This option is often the most comfortable one for people who want to move up. There is something that is difficult about selling the home you live in when you don't know where you are going to go. Finding your new home first gives you the motivation to sell your current home. The whole process falls together better in your mind when you go out and purchase a home first. The risk of this option is that you will lose out on Home 2 because you are not able to sell Home 1. This is a significant risk in a market where there is a 7-month supply of homes on the market. Also, as I noted above, you will have to give the seller more money if you use a sale-of-home contingency, and you will feel significant pressure to sell Home 1 as quickly as possible, putting you in a position to take less money for it. This pressure will come from the knowledge that you could lose Home 2 at any time because of the "kick out" clause in the contingency. This allows the seller to kick you out of the sale if a non-contingent offer comes along and you are not able to remove the contingency because your Home 1 has not yet sold. This possibility is heavy on people's mind after they spend significant time, money, and mental energy to work out the purchase of Home 2 (ie. negoitiations, home inspection, and planning for the future in Home 2).

C. Buying Home 1 First Without a Sale-of-Home Contingency: This is only an option for people who can afford to carry mortgages on both homes. For a seller to accept a contract under these circumstances, they will require proof that you are able to carry both mortgages. In a sellers market, a move-up buyer could prove their ability to do this--sometimes only with a high-interest loan they could qualify for, but would not actually want to take. This strategy worked for people in a sellers market because they would turn around and sell Home 1 the following weekend, then be able to qualify for a more favorable loan on Home 2. The worst case scenario of not selling Home 1 was extremely unlikely. In the current buyer's market, someone using this strategy is very likely to end up with an unfavorable loan or at best paying two mortgages for a while. Of course, those who have the financial means to carry two loans, and to qualify for two loans that are of a reasonable interest rate may choose to buy first and hold onto both home as long as they need to.

Another option is to get a bridge loan to hold both houses until you can sell House 1. If finances are tight for you this will put a lot of stress on you, and may put you in a desperate position when you are negotiating with a person wanting to buy your home.

For most people, I recommend getting Home 1 sold before you put a contract on Home 2. You should go out and see what is available for you to purchase before you put your home on the market. This will give you an idea of the types of homes available to you. It will also give you the motivation you need to get your current home sold.
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3 votes Thank Flag Link Wed Jan 21, 2009
Hi Jennifer!

Thanks for asking a great question. And thanks to all those who added their thoughts and feedback. Great job.

This was the most viewed question on Trulia Voices last week. I highlighted the thread and some great answers on our Trulia corporate blog.

Keep up the great work everyone.

Everyone's Voice Counts!

Social Media Guru at Trulia
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1 vote Thank Flag Link Mon Jan 26, 2009
There are always two ways to skin a cat and with the market changing, you need to do things differently.

While the temptation may be great to buy a replacement home first, being it's a buyers market, I think it puts you at great risk.

If you buy first, you will know where you are going and how much you will be paying. You also won't have to worry about finding a place or lowering your wish list with no where to go if your home sells quickly.

However, the financial risks of buying first are too great. I believe It's much better to sell your current home first and NEGOTIATE FROM A POSTITION OF STRENGTH, not weakness. Yes, you may have the inconvenience of moving to an interim rental "if that were to even happen", than it is to end up owning and paying for two homes. Or worse, you will have to lower your listing price for way below what you were expecting because now " YOU HAVE TO SELL"

Dave Tap Tapper
Cashin Company
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1 vote Thank Flag Link Thu Jan 22, 2009
While your question of timing is not unique, the specifics to provide an answer are unique to your own situation. Good advice provided so far, and when you are closer to making your decision to move, call a trusted Realtor who can help you finalize the timing for your move. Our spring market kicks off after Super Bowl Sunday. The spring is one of the best times to sell or buy a property. You can contact me for additional information at
1 vote Thank Flag Link Wed Jan 21, 2009
If you can handle it, I suggest you sell your current home before you buy the dream home. I have known many dissapointed families who bought their dream home first, with a contingency upon selling current home, only to see thier dream home vanish because they could not sell the current home within the contingency period.

I know these are tough decisions. In fact , Im working with a couple right now who tried to buy a new home with a contingency on selling the old. The wife, a wonderful lady, became so distraught, that she had to go under a doctor's care.

BTW, my company is a member of terrific nation-wide relocation company. We have helped thousands of families by finding them an agent who is professional and who knows the territory where they want to move.
And, this service is free.

Please email me for more
0 votes Thank Flag Link Fri Jan 23, 2009
I believe you should first go out and explore what the asking prices are in the neighborhood you're looking to move into to get a sense of current pricing, but don't go out seeking your dream home just yet. The economic market today simply is not strong enough to support your decision to go the route of buying first and selling second.
There is no question in my mind that you should sell your home first.
The chances of an all cash buyer appearing these days is very slim unless you are in a very special and desireable neighborhood. I know of too many deals that have collapsed because of buyer's financing falling through. Those types of delays are common and not many people are comfortable carrying two mortgages for an extended period of time. I don't recommend it.
The safer choice is to sell first and then you will be in the strongest position to negotiate on a home you wish to buy -- your purchase would not be contingent on your selling your current home, and you would know exactly how much cash you possess to spend on a new property.
Good luck and best wishes in whatever you decide.
Michele A. Peters, Esq.
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0 votes Thank Flag Link Thu Jan 22, 2009
0 votes Thank Flag Link Thu Jan 22, 2009
Hi Jennifer,

Lots of advice above, some quite good. Here's what I'd recommend in order to avoid carrying two mortgages, having to sell under duress, or having to buy with suboptimal financing:

1) List your home with a capable full time Realtor, after interviewing at least three and telling each your goals, and seeing how well they LISTEN. Mistrust the one who offers to list it at the highest price; they are trying to buy your business and will be asking for price reductions once the listing becomes stale and agents aren't showing it anymore

2) Include a 1-3 month leaseback option, electable upon 30 days notice, in the listing. This will give you the time flexibility you need depending on how your sale proceeds

3) During sale negotiation, require a full 3% earnest money deposit from the buyer and a moderate term escrow, perhaps 45 days

4) Find your dream home and put a noncontingent offer on it once the buyer of your existing home has released all contingencies. Should the buyer fail to complete the transaction, you have their deposit to cover the potential mortgage overlap

5) Complete the purchase of your dream home, negotiating financing from a position of strength, and enjoy it for years to come!


0 votes Thank Flag Link Thu Jan 22, 2009
Suggest you do the following:
1. Take a line of credit as part of down payment if your home does not close in time.
2. Get a FT hard working realtor who will will advertise your home generously. By that they do virtual tours, staging, find painter, carpet installer and paid marketing. It is not unreasonable to demand TV advertising to get the traffic. Some agents pay or share staging cost. Those top guns or realtors who claim they are the best still got 24 hours a day to take care of 24 listings. Your listing is just a fraction of their devoted energy.
So interview those wanting to sell your home with relatively light baggage.
3. Consider incentives for both buyers and selling realtors(not listing).
4. Most homes sell only during the first 30 days. If you price it right it is still too high to most buyers. Those with the means are looking for good deals not just priced it right.

After you receive your offer ask to rent back if possible and look for homes. April-August is the best time to
put homes on the market. Good luck.
0 votes Thank Flag Link Thu Jan 22, 2009
The problem with the market today is the uncertainty of selling your home. You must price your home at market value to increase the chances of it selling. For many homeowners, this is not possible, as their mortgage exceeds the market value- thus leading to a Short Sale situation.

Many Short Sales are sold quickly, here where I am from in South Florida that is all that is selling and being demanded of buyers. If you are not in a Short Sale situation, make sure you conduct research on market comparables, to see what the Price/SF of sold homes have been in the area.

It's a great time to buy, and for many, they can purchase a larger home for the same price that they bought their previous home at. If you buy a new home, before selling your previous home, you are left with (2) mortgage payments. Sometimes, I see homeowners opt to rent their previous homes as the market value isn't too great, but their is a large demand for rental homes.

In the end, make sure you have a secure plan for your previous home: either a sales contract in hand and pending sale or a lease contract.
0 votes Thank Flag Link Thu Jan 22, 2009

I know it is not what you want to hear-SELL FIRST! You can make the contract with your buyer contingent on finding suitable housing.

Anyone who tries it the other way typically regrets it. In addition, you do not have the upper hand in negotiations when making your offer contingent on the sale of your home.

Best of luck
0 votes Thank Flag Link Thu Jan 22, 2009

I would make sure your current home is Under Contract and there are no contingencies at all remaining before writing on a new home. But note, in today's market, a deal can turn sour hours before closing.

Depending on how conservative you are as an individual, I may even suggest closing on your old home, move into temporary quarters in a school district where you plan on buying, then buy a new one. Although this may seem difficult, it is actually much easier than owing 2 homes and having difficulty affording both. Renting short term is the safest solution.

Hope that helps a little?

Kyle Davis, your Realtor, "by Design!" RE/MAX Select Properties, Inc , VA 20147
0 votes Thank Flag Link Thu Jan 22, 2009
I am going to give you a short answer. Please sell your present home first. There is plenty of inventory to choose from when you go to buy your new home. It will give you much needed peace of mind to sell your present home first. Six months ago, I might have said something different but I think people who bought first would strongly advise you not to make the same mistake that they did.

The only exception would be if you fell in love with a one of a kind home and you are willing to pay double payments for an indefinite period of time. A lot of fabulous homes that are well priced and marketed are taking much longer to sell.
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0 votes Thank Flag Link Thu Jan 22, 2009
If you are considering a move in the New York market (Rockland County), consider that your home should already be on the market. Put it up for sale now and then when you have a solid deal in hand, start your search for a new home. Remember other people want to move in the summer too, and the best timing for you may be great for them too!
If you are ready to Make Your Move, please feel free to give me a call.
Laura Rusiecki
NYS Associate Broker
Prudential Rand Realty
0 votes Thank Flag Link Thu Jan 22, 2009
Hi Jennifer,

One thing you can do that a number of my buyers did who owned lovely homes but did not want to take a hit in this market (we are in the Chandler area a suburb of Phoenix) is Rent their home. That way they could take advantage of the market and get a larger home and wait until the market rebounds to sell their current one. This is possible when you can afford it financially. To take it one step further, you can also rent it out month to month which is harder for renters to find, with the understanding that it is for sale. That way you have your new home, you have money coming in on the old home and you are not under as much pressure to take a lowball offer. Put it all down on paper and you will know which decision is right for you!
0 votes Thank Flag Link Thu Jan 22, 2009
The answer is that it depends on not just the market in general but the market specifically in your area. If it's a buyers market, as it is for the most part now, then it's important to at least have your current home under contract before you start seriously looking for the next home. Once you do that you can work hard on negotiating the next house and making that sale contingent upon the closing of the one you are currently in..... it's all timing and making sure you have good professional guidance!
0 votes Thank Flag Link Thu Jan 22, 2009
Hi Jennifer,
This is a Buyer's Market which means there are a glut of available properties out there. You will probably find more than one "dream home". For your piece of mind, please sell your current home first. Take your time window shopping while your home is listed. You don't want to find yourself in a situation where you might feel you are under the gun to accept an offer that you might not consider but are only doing so because you are making two mortgage payments (....and two insurance payments, and two tax payments and two HOA payments and two sets of utilities payments etc....get the picture?)
Buying and or selling a home can be stressful. Please don't add to the situation
All the best!
Marie Manshum
Real Living HER
Powell, OH 43065
0 votes Thank Flag Link Thu Jan 22, 2009
Generally, in this current buyer's market I advise to sell and close on your current home prior to entering a contract to purchase! That way you know exactly how much you have to put down on the new home and you are not caught between two mortgages or in danger of losing escrow due to an inability to close on the new home. It's a good idea to be as familiar as possible with the homes in your new school district so that you have a good basis once you are ready to proceed.

Since real estate is local in nature this particular buyer's question is best answered by a real estate professional in the Fairfax area who can speak directly to the local market.
0 votes Thank Flag Link Thu Jan 22, 2009
You need a team consistent of every one that have a say on the selling your home, a realtor familiar with the future school district area , a realtor familiar with your actual area, mortgage planner( not just a loan officer), CPA, and an attorney. MAKE SURE THAT YOU WORK AS A TEAM.
Every one situation is different. If you don't believe me, ask the IRS.

There's too many variables for me to generalized...but do put a team together and you'll save a bunch of money.

Real Estate is THE number financial decision that you can make in your life time.

Do not take it litely.

Good luck!

Juan at
0 votes Thank Flag Link Thu Jan 22, 2009
Hi Jennifer,

I would think one of the main considerations for your plan would be the mortgage amount of the home you currently own, and the debt, if any, you plan to incur on the second home.

If your current home takes a while to sell, is it financially feasible to pay both mortgages? If the answer to that question is yes, and it would not create a financial hardship, I would say take advantage of the current market conditions and go ahead and purchase in the desired school district. You might also consider renting the current home for a while to offset the mortgage.

If two mortgages would create a financial hardship, I would suggest waiting until your current home sells. You could sign a contingent sale contract, but if the first home doesn't sell, and you can't carry both mortgages, it will be an excercise in futility. It could also mean that you incur expenses related to the purchase, such as inspections, surveys, etc., that will be wasted.

I hope this helps and good luck. Feel free to shoot me an email at if you have any questions.


Marty Jones, CRS, CRB
0 votes Thank Flag Link Thu Jan 22, 2009
Get PreApproved First before doing anything - This will let you know if you have to sell in order to buy. If you can buy without selling first this can be very helpful, because maybe you might keep the first home as an investment home and rent it out to someone. Also If you don't get preapproved for the amount you need for your dream home then wait till a later time before trying to purchase your dream home.

Consider Building Your Dream Home - Perhaps a builder will let you do a Lease Purchase on the new home until your home sells, but make sure you can handle both payments at the same time.

Most Common Way and Most Practical: List your home first, get a contract on your current home with at least 30 days for time for you to find your dream home, and then set the closing dates within a couple days of each other.

Not the Best Way, But it Works: Find your dream home first, make an offer contingent upon your home selling, be ready to list immediately because they probably will require that your home be listed with a realtor before agreeing to it, try to sell your home very fast - be prepared to negotiate your sale price. This way hurts your negotiating on the buying end and hurts your negotiating on the selling side as well because you end up being in a hurry to sell. Not a good idea, but it works.
0 votes Thank Flag Link Thu Jan 22, 2009
Hi Jennifer,

I have clients who are in a similar situation - they have a house in a great school district, but their kids are grown so they want to move to a different type of community and don't really care about the schools. After many discussions, we decided it would be best for them to wait until the spring to put their house on the market (it has incredible landscaping!) and start seriously looking once their home is under contract. In the meantime, we've been looking at homes in various communities - that way, they'll already know which communities they prefer and will be able to closely target their home search when the time is right.
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0 votes Thank Flag Link Wed Jan 21, 2009
Hi Jennifer,
Looking at the market conditions, putting your house on the market by well preparing it to sell meanwhile browse the listings as well visit the areas and narrow down the location you may want to move. Once your house goes under contract with most contingencies removed at that point put a contract on your next home in your narrowed down area. NOW this is an ideal way to move whenyou have a house to sell.
Each home seller and buyer's situation is unique and facts need to be identified before any advise can be given. I recommend sitting down and planning between the family and with a Realtor, who you can feel comfortable and can Trust will most likely help you MOST , how your move shall be planned.
Many people did do moves in last few years; without planning pros and cons and thorough understanding of what is involved and no wonder got stuck!! We hear those stories all over the place.

So I say PLANNING with the right person is the key!

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0 votes Thank Flag Link Wed Jan 21, 2009
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