How can I buy a new home if I need to sell first?
You’re ready to make a move. But one small problem…you need to sell your current home first to qualify for a loan to purchase a new property. But what if you sell your home and have no place to go? It’s the one of the toughest maneuvers in real estate but we help clients make it happen.
Here are some of the key strategies.
A contingent sale.
The least likely to work in the LA market, but the #1 option if it can be done. Simply put, you make an offer on a home subject to selling your current home first.
The Pros
No risk for you as the buyer. You have a negotiated time to sell your current home after you’ve secured an accepted offer on a new one.
The Cons
Very few home sellers will consider. Almost never a newer listing. If you can even get an offer like this considered, it will cost you. This type of offer is risky to a seller unless the home is lingering on the market. Sellers and listing agents aren’t too interested in a contingent offer unless the buyer is willing to pay a premium.
Reality Success Score: 17%
The reverse contingency (seller contingency).
We list your home for sale but advise interested buyers that you will only close the sale IF you find a replacement home (within a negotiated time, typically 30-60 days).
The Pros
You can test the waters selling your home and rest assured that you don’t have to close unless you find a new home. You can list your home on your own timeline.
The Cons
Buyers are sometimes turned off by the uncertainty and may not bid as high as they might otherwise. Some may pass all together. This works best on a desirable property that buyers are willing to wait for and take the chance.
This strategy is best when used at a time where good replacement home options are likely to appear or are already out there.
Reality Success Score: 63%
The lease back.
Here we take the biggest leap of faith but there are rewards. You list your home but require the buyer to allow you to stay 30-60 days after the close of sale.
The Pros
Everyone is used to this and it’s common. As a seller, this option gives you the best environment for the highest sales price without deterring buyers.
You’ll close the sale on your existing home and stay after the close as a tenant for 30-60 days so that you can find a new home with cash in hand (over 60 days is possible with a cash buyer only…and starts to push the envelope). In a strong seller’s market or on a desirable home, often buyers offer the lease back period at no cost to the seller.
The Cons
There is no guarantee you’ll find a new home. But for the focused buyer with realistic options and a strong agent, this is typically the smartest option and best financial decision.
Reality Success Score: 90%
The market is ever changing. Having an agent you can trust to help you navigate all of your options is the best decision you can make.
