Selling – and also Buying – a Linton Hall home this Spring? Timing is Key!

HOW TO DO BOTH TRANSACTIONS AT ONCE, WITHOUT LOSING MONEY

Regardless of the market or location, many sellers we work with are also buyers, looking for a replacement home. What happens when you find a home you like but haven’t yet sold your existing one? Or, suppose you sell your home and are having difficulty getting an offer accepted on a new one. In either scenario, a double-sided transaction can cause confusion and overwhelm for homeowners. Fortunately, with our decades of experience, we have a process to make selling and buying at the same time easy and worry-free. If you are considering selling and buying this year, here are the steps we recommend to ensure a smooth experience.

Get a Sense for the Playing Field

There are options available to reduce your risk, including contingencies on your contract and special financing instruments. However, depending on market conditions, it may not be in your best interest to leverage these tools. For example, in the seller’s market, we’ve been experiencing for so long in Northern Virginia, home buyers have faced stiff competition when making offers. In these cases, sellers may turn down bids that include contract contingencies. On the other side of this, as a seller, in a hot market, your risk of waiting and waiting to sell is relatively low.

Right now, market conditions in Northern Virginia continues to favor Sellers. This means that less inventory is available, and there is more pressure to make offers above the asking price. Some properties receive multiple offers which initiates a bidding war.  There are still a high number of motivated buyers in the local market eager to purchase.  With so many buyers competing for houses, Sellers are less likely to accept contingencies related to a buyer’s need to sell their existing house.  This creates a “Catch-22”. Do you sell your existing house first?  Or do you buy first?

The first step is to sit down with your agent and determine what your specific needs are and what risks you need to mitigate in today’s market.  Armed with the best information, you can decide whether buying first, selling first, or concurrent transactions makes sense for you.

Buy, Sell, or Both?

For obvious reasons, oftentimes agents will tell clients that it’s best (and far less complicated) to sell your home first and then buy a new one. However, this does come with risk and complication and the agent giving this advice isn’t risking anything.

We never advise our clients to do this if it could lead to a stressful buying situation, or worse, leave a family stranded in a hotel for indefinite periods. Sometimes, buying first is smart; sometimes, selling first is safer. In many cases, it makes the most sense to do both concurrently.

Preparing for Concurrent Transactions

Whether you plan to sell first, buy first, or proceed with both simultaneously, timing truly is everything. To succeed in a double-sided transaction without losing your shirt, it’s important to do plenty of advance prep for both deals.

First, meet with you real estate agent to discuss market conditions, expectations related to timing and likely sales price, and other preparations for listing your house. This means doing all the pre-listing work, staging, and marketing prep (much of which your agent will handle for you). With a two-sided sale, it’s critical that you’re ready to jump on the market at a moment’s notice.

Next, visit with your lender. He or she will help you pinpoint a budget that you would easily be pre-approved for, at least after your home sells. Discuss whether a pre-approval prior to selling is possible, and if not, what other options are available so that you can secure a new home before you sell. You may be able to obtain a Bridge Loan. Beware that these are often high-interest loans with strict terms, but they do enable you to enter a contract on a new home before handing over the keys to your existing one.

Make a Move!

At this stage, you may be able to list your home and house-hunt at the same time (depending on your financing options). If not, sometimes sellers will accept a contract with a Home Sale Contingency. This simply means that you make a legally binding offer that you are not required to complete until your current home sells.

If you are unable to obtain special bank financing to bid on a new home prior to selling (and your agent feels strongly that sellers will scoff at an offer with an open-ended contingency), you will need to sell your home first. In today’s market, it should sell relatively quickly. Have a plan in place in case it takes a while to find a replacement home. Talk to relatives, shop around for fair-priced extended stay suites or even month-by-month rental homes. If you are prepared to be between homes for a few months, this makes the buying process infinitely less stressful, and you will not be compelled to over-pay.

If you are considering selling and buying in the Linton Hall area this year, give us a call at (703) 485-HOME. We’ ll take a close look at your individual situation, analyze the market surrounding your property, and work with you to ensure an easy and stress-free move.