Are you scared to list your home for sale because you don’t know where you would go if it sells before you find a new home?
Are you searching for a home but cannot seem to find it?
Worried about having to move twice?
Worried about selling and buying safely?
If you answered yes to any of these questions, then you are one of over a million people across the country right now who feel the same way. This year has thrown everyone for a loop with the COVID crisis, questions about housing market health (note- it’s healthy!), what the market is actually doing, and how to buy and sell safely.
A lot of people are wondering about how the current situation impacts otherwise normal questions about inventory and when the right time would be to list. Inventory started low, and then dropped even lower in March during the stay at home mandates but is steadily and quickly increasing. This means NOW is a great time to list to take advantage of motivated buyers before other sellers start to saturate the market. Many sellers, however, are pausing on selling for a number of reasons and right now are at a stalemate.
The problem with sitting still and not researching your options is that you’re not doing anything to get the home you want. There are options and you can make the move. In this market, your move has to be very well planned out with all options and protections fully understood and ready to deploy so that you don’t end up having to pay two mortgages, moving twice, selling without having a home to go to, or not being able to find the home you want. The good news is you don’t need to fear if you do things the right way from the beginning.
Here are the four important steps to selling your home and getting the home of your dreams:
- Hire the Right Realtor- Interview a few different Realtors and make sure to hire the right one. Some tips for who to hire are:
- Make sure they have access to ALL the homes for sale including homes that haven’t even been listed yet.
- Make sure they have a lot of experience, specifically with assisting people selling their current homes and buying new ones.
- Ask for testimonials of other sell/buy clients so you know they have handled these situations before.
Once this biggest and most important step of hiring a Realtor is complete, you will be guided through the next steps:
- Get Pre-approved by a qualified mortgage lender- When you do this, it is very important that you have the mortgage broker run a few different scenarios of sale prices for your home. For example, if you and your Realtor think your home is worth $500,000 have them run that scenario and have them run it at $475,000 and $525,000 just so that you have a full understanding of what you can afford to buy if you sell for any of those numbers. What you sell your home for obviously impacts what you can afford. Your Realtor should assist you in determining roughly what you will profit from each sale price scenario.
- Get Connected to an MLS feed- which will send you the available homes for sale. Looking for a home by searching around on Zillow or Trulia or Realtor.com is not the best way to search. Those websites are a good way to start looking when you are just playing around and curious, but they aren’t a good way to search when you actually want to find the right home because 10% of the homes that are for sale aren’t even on those sites, 25% of the homes on those sites aren’t even for sale and likely never will be!
- Take Action to Sell and Action to Buy- Many times “Want-to-Be” sellers and buyers don’t take one step without the other and all that does is hold you back. Depending on your situation, your urgency, the time of year, and your financial position, it may make sense to make an offer on a home before listing yours or it may make sense to list before you find a home to buy. Both options cause people to get nervous, but if your Realtor is guiding you along and recommending one way or the other, you have to have some level of trust because if you don’t take some steps you will end up doing nothing.
Regardless of which way you go, it is important to get out and REALLY look at homes and drill down on where you want to be and get yourself Ready to Strike when the right house comes up.
You should be moving forward with all preparation steps involved in listing your home for sale. Again, whichever step you take first will depend on your circumstances but it’s critically important to get yourself completely ready on both sides!
Sell without Listing with an “Off Market Sale”
Yes, in this market it IS possible to sell your home without listing! Of course, that does not expose it to nearly as many buyers as you can by listing it traditionally. When you work with a company that does a tremendous amount of marketing and has thousands of buyer clients, it is possible to sell it just by exposing it internally among Realtors at a company. The benefit of it not being on the market to some sellers is not having nearly as many people come through the home to see it, and not nearly as many driving by. This is attractive to some sellers who don’t like the idea of selling in such a public fashion.
In addition, when buyers buy a home off-market they are usually more excited about it since it’s less likely to be a bidding war situation, so they tend to be more willing to close at the seller’s discretion in order to give the seller the time they need to find the house they want before leaving. This is the part that is often extremely beneficial to a seller who still hasn’t found the home they want.
Sell by Accepting a Cash Offer
There are many reasons you may want a cash offer on your home instead of listing traditionally, most of which include the desire to avoid the inconvenience of showings and open houses that interfere with your schedule. A lot of sellers want to go this route because they can avoid having to prep and repair the home for sale which can be costly depending on the condition of the home. This cash offer option also allows sell/buy clients to avoid having to put a contingency in the offer for the next home they want. And with this type of sale, sellers can sell as quickly as 3 weeks or can wait until they’re ready to move.
Protect Yourself As a Seller
There are several ways to protect yourself to be sure that you can live in your home until you find the house you want. Below is a list of methods:
- Disclosing in MLS- You can put a disclosure in MLS that says, “Sale is Subject to Seller Finding Suitable Housing”. This means just what it says; the seller will not go through with the sale until they find what they want. This was frowned upon by buyers years ago but now it is much more accepted due to the low inventory that we saw over the past few years. If a deal was made under these terms, this language would also make its way into the Purchase and Sales agreement.
- Delayed Closing Date- Another method that gives the seller plenty of time to find a new home is to make the closing date as far out as possible. Sometimes buyers and sellers will agree to as much as a 4-month close. The normal timeframe is more like 2-3 months, but if a seller really needs the time to find what they want and the buyer is willing to wait, then there is nothing stopping anyone from agreeing to a longer timeframe.
- Rent Back– This method has become more and more popular over the last two years. It is used when a seller actually needs to sell before they can qualify to buy. In that case, the buyer and seller would close on the home, so the seller can get their money, but the seller would stay in the home as long as they need until they find the house they want. The sellers then pay the new owner’s rent, or the fees are deducted from the sale price, for a previously determined amount of time.
- There are additional methods which can be used when a buyer and seller make a deal- they can be as creative as they want and need to be. If both parties are flexible and work together it makes things a lot easier for sales to happen.
Protect Yourself As a Buyer
If you cannot afford or qualify to buy a home before selling your own home but you see your dream home before you have your home under contract you are naturally going to want to make an offer. If you do this, you must protect yourself. In order to do that, you would need to make your offer “Subject to The Sale of _(property address would be entered here)_ Home.” This is called a contingency.
The issue with making an offer with a contingency is that sellers tend to frown upon it and sometimes rightfully so. Put yourself in the seller’s shoes. You receive 5 offers on your home and one of them is a “subject to” offer. Would you want to take that one? Probably not. Unless it’s the highest offer then you may chance it. But as the buyer, you and your Realtor need to make it very clear to the listing broker that you are going to list your home and sell it right away. You may even need to show them the price you will be listing at and comparable sold homes in the area to prove that it will sell right away. If they do accept they will almost always put a timeline on it so that you must sell it quickly which in this market should not be a problem so long as you price correctly. This can be done but it is tricky to pull off especially in the late winter and early spring months when things are so competitive.
If you read all of the above, you should see by now that your move can be made and that you can find the home you want. You can do this safely and on your timeline. Meeting with a Realtor to discuss a plan and all your options doesn’t mean that your home will be up for sale a moment before you’re ready. It is also important to remember that when you are the seller in this market you are in the driver’s seat, so if a buyer won’t agree to your terms you simply deny their offer. There is nothing that forces you to take a buyer’s offer whether you are on the market or not. It’s your home, it’s your choice!