Selling a home while buying another home at the same time can be challenging. If you are thinking about doing this, you probably have questions. So, we’ve gathered together a list of frequently asked questions to help you through the decision-making process.
What are the pros and cons of selling a home with a contingent offer?
Cons: If you accept a contingent offer, there’s no guarantee that the buyer’s home will sell quickly. As a result, if you need to sell your home within a certain time frame, it’s essential to specify a timeline in the contingency agreement. This gives you an out if their selling process drags on.
Pros: If your house has been on the market for a while, a contingent offer might be a better option than no offer. But what if another offer comes in while the contingent offer is in place? This can happen. To prepare for this type of scenario, be sure to include a “bump” clause. As part of the contract, include language that specifies a time frame for the first buyer to decide whether they still want to pursue the contract. This requires the buyer to respond. If the buyer does not respond, you can legally back out of the contract and pursue the new offer.
What are the pros and cons of buying a home with a contingent offer?
Cons: A contingent offer doesn’t mean as much in a popular market such as Bainbridge Island. Multiple buyers with multiple offers can be common. As a result, it might be harder to get a seller to agree to a contingency offer. Also, you may be competing with buyers who don’t need to sell their home before buying, making a contingent offer impractical. If you really want to purchase a particular property, you may have to make an offer outright.
Pros: If you are able to place a home sale contingent offer, this allows you to smoothly transition between houses. You won’t have to worry about renting a temporary place or placing your belongings in storage. Once your home is sold, another one will be ready and waiting for you.
If you have more questions about contingency offers, we’ve compiled more detailed information for you.
Do I buy or sell first?
This is a great question because there are pros and cons to both. Even if you intend to do both simultaneously, you will most likely have to begin one before the other.
Selling first: Starting the selling process first sets you up for greater success in buying a new home. If you sell your home, you’ll have more cash available, which increases your buying power and your down payment. It’s also nice to pay off your first mortgage through the sale before taking on a new one. However, the downside to selling first is that you don’t have a new place to move into. This is a common scenario when selling and buying a home since the timing rarely aligns perfectly. If you do find yourself in this position, one option is to negotiate a rent-back agreement with the buyer. This will allow you to rent the house temporarily and give you more time to find your new home.
Buying first: Buying a new home before selling makes moving a lot simpler. There’s no need to find temporary housing. Instead, you can pack up and move everything to the new place. Making the decision to buy first really comes down to your finances. Having two mortgages means taking on more debt, which can impact your loan terms for the new house. Also, if you haven’t sold your home first, it might be challenging to arrange enough money for a down payment. Without a down payment of twenty percent, obtaining private mortgage insurance (PMI) may be necessary. Lastly, the decision to buy first is based on the assumption that your current house will sell relatively quickly. This is a safe assumption in the Bainbridge Island market, but not a guarantee.
Ultimately, the decision to sell or buy first depends on your situation and what works best for you.
Do I really need to stage my house?
The simple answer is yes. While staging your home may seem like a daunting task, it’s worth the effort and investment. Overall, staged homes typically sell faster and for more money – a double win! Also, a big part of the selling process takes place online. This is where most buyers will see your home first. A staged home better lends itself to eye-catching photos and great first impressions. When potential buyers see your home online, you want them to be able to imagine themselves living there. Staging is the best way to do this and helps interested buyers take the next step. Even partially staging your home can be incredibly beneficial.
Is now a good time to buy and sell?
Based on what we’re seeing in the Bainbridge Island market, we think the answer is yes. The average sale price here in Q1 was $1.6M – and that’s the slow season. Bainbridge’s housing market is heating up and a great real estate agent can help you achieve your goals. Here at Windermere Bainbridge Island, our local agents are highly rated, know our market, and can effectively negotiate on your behalf. Contact us today, and we’ll help you get started.