The scenario of buying and selling your home at the same time has been coming up more recently now that the housing market in Sudbury has entered a more balanced state. In a very competitive market, you can still buy a new home and sell your existing one at the same time but it is definitely more challenging. The key to doing this successfully without having to find temporary housing is having enough time to work with.
The pieces to this puzzle are simple but the order of events is often concerning. You are going to buy a home and you are going to sell your current home. Which do you do first? Do you need to sell first so you can then have the money available to go and buy? Or can you buy first and sell later? What happens if you sell and can’t find another home? What if I buy a home and haven’t sold my current one?
If you have another home that you can move into while you sell your house and find another one (like your parent’s or kid’s or friend that is willing to put you up) then you can tackle this in whatever order you wish. Most people don’t have that luxury and need some better security when buying and selling homes.
Everybody’s situation is going to be different and the order you choose will make sense to your family. The best way to tackle this situation is to find the home you want to buy first. While you are searching for your new home, get your current home prepped and ready for sale. De-clutter, paint, stage and do all of those little repairs you have been putting off. When you find the home you want to buy, your agent will guide you through making an offer conditional on the firm sale of your home. This means that you will not be forced to buy the new home if your current home does not sell. This condition generally is set up with a timeline to get your home sold so that the seller of the other home doesn’t have to wait indefinitely for you to sell your place. That is why it is a good plan to get your home ready such that when you put in your offer, you can quickly get your current home on the market.
When you add in a condition to a purchase offer on the sale of your home, the seller usually is allowed to continue showing the home to other potential buyers. The seller wants to sell their home as quickly as possible and for the most money possible. The seller can accept your conditional offer but if another offer comes in that they want to work with, they may choose to do so. Again, depending on how your offer is structured, the seller typically has to give you notice and an opportunity to remove the home sale condition from your offer. If you remove the condition, then your offer stands and you are now committed to buying that house even if your house doesn’t sell. Risky business! If you don’t waive the condition, then your deal will become null and void and they will work with the new buyer.
Ideally, you will want to set up the sale of your home to finalize on the same day or a day or two earlier than the closing of the home you are wanting to buy. This helps to make sure the lawyers have enough time to transfer the funds for the home transactions. You can line it all up for the same day but make sure your lawyer is aware that is happening so they prioritize the transactions. Another option is to ask your lender for bridge financing. If they agree, that will allow you to hold both properties for a short period of time as the sales finalize.
Still not quite clear on how buying and selling your homes will play out? Feel free to connect with me and I will happily walk you through the scenarios and answer your questions.
Sold over asking! Crazy amounts above the list price are the talk of every virtual water cooler these days. Can you believe that they sold their home for that much over asking? Why am I having such a hard time buying a home in my price range and keep getting out-bid?
If you have been pondering these questions, rest assured that you are not alone. Having had such a strong seller’s market, pricing has been rising and it is challenging to find a home in your price range. Especially if you are looking at the list price of what you can afford.
Traditionally a listing agent will price your home based on what other homes like yours have recently sold for in your area. This makes sense to everyone involved. Same type of home, same area, same sort of finishings, same time, the price should be very similar. That is still happening in some cases but more and more, agents are purposefully listing their client’s properties well under the anticipated sale price. Because there are so many buyers and less homes for sale, the lower price gets more traffic in the door and more interest and more calls to the listing agent. This means potentially more business for the agent in the future. It also can create a bidding war for the house with multiple people interested in it and many people offering a bid. More bids typically equates to a higher sale price. Then, once the house is sold, the agent can run around telling everybody what an great job they did by selling the house for well over the asking price!!! And then they wonder why it is that many people don’t like and don’t trust a real estate agent.
As an agent, your job is to help your client sell their home for the most money in the least amount of time possible and to make the process as stress free as you can. The market will ultimately decide what price is acceptable for the property. If someone is willing to pay x amount over the asking price, then that is what the house is worth. But marketing it knowing that the home is worth much more than the asking price is certainly questionable. It does generate interest but I’m not convinced the agent is working in the best interest of their seller. It seems like they are more working for themselves and their self-promotion goals.
The market is starting to balance out with more homes being listed for Spring. This practice will start to become less and less prevalent. The best advice I can give to you if you are looking to buy a home is to find an agent that will explain to you what is going on and help direct you to the homes that you can afford and steer you clear of the ones priced too low. If you are selling your home, just know that this lower price scheme will not work much longer as more and more buyers get wise to the practice.
Accurately assess the fair market value of your property so it sells fast and for maximum profit.
Use the latest marketing tools to make your home stand out from the crowd and find serious buyers who are ready to act.
Stay ahead of market trends and offer professional advice and guidance.
Connect you with the right professionals and resources.
Be transparent and accountable in supporting you throughout the entire decision-making process.
Negotiate on your behalf and put you in an ideal position when reviewing and accepting offers.
By far, the past couple of years has been some of the worst times in real estate. The pandemic forced people to stay in their homes, and stay they did! The number of listings is the lowest it has been in many years. With interest rates incredibly low and many people wanting to get into the market, the demand on homes has gone sky high. A perfect storm generating a very strong seller’s market.
New buyers are quickly having their dream of home ownership pushed away from them as home prices rise. Without an adequate supply of homes to choose from, the ones that do show up are selling well above the listing price and are often subject to bidding wars. In just one year, the price of homes jumped over 20%. i.e. a $300k house at the beginning of 2021 would now fetch about $360k (or more).
It is disheartening to also learn that more than 30% of the active buyers are those looking to invest in rental homes. They usually have more than 2 homes in their possession and buy the homes strictly as rental properties. These buyers typically have a lot more buying power than a first time home buyer and are more able to bid on a house with no conditions – a very risky proposition for most people buying. There are some rumours that there will be some restrictions imposed upon these buyer by the Government shortly to help curb this activity and give others more of a chance. More to come on that.
Sellers find themselves in a catch 22 situation. Many sellers are looking to move up or down and not get out of the home market altogether. So, in order to sell, they need to have someplace to go to. So they find themselves in the buyer column, also struggling with competing offers where a condition on sale of their property will almost never be accepted when others are willing to buy with no conditions. So they must wait it out until their financial situation changes or they are willing to risk the sale without the condition on sale of their current home.
As an agent, we are ready and willing to help out both sides but there simply are not many opportunities available. We also must wait for the market to become more balanced before we can really be effective.
The good news is that things are always changing. This market will adjust and more opportunities will become available again. Policy changes, economic changes and the subsiding of the pandemic are all things that can and will change the market. Let’s just hope that those things that make positive change come soon! For everyone’s sake.