At this point, you should be getting ready to list your old home, and you also have a pretty good idea of the type of home you WANT to purchase and CAN purchase.
As mentioned earlier, the best case scenario is that you’re able to get your home purchase to coincide with your home sale. This is especially important when you want to use your home sale earnings to purchase your new home, or use them to make a substantial down payment.
Of course, getting the timing right can be tricky. There are many issues to be aware of, such as:
What kind of market are you in?
If you’re in a seller’s market, there will be more buyers than homes for sale, and selling your home would be fairly easy and quick.
At the same time, that would mean a lot more competition when buying a home. You could easily lose to another buyer, or you would need to offer more money and fewer contingencies to get your next home.
Writing a contingent offer means that the purchase is contingent upon you selling your old home. In essence, this would protect you in case the sale falls through for whatever reason. And while this would seem like a good way to protect your own interests, said clause could actually keep a home seller from accepting your offer.
There are two types of contingent offers. One where your home is currently listed, but you don’t have a buyer yet, the market. The second one is when you do do have a buyer lined up, and the transaction is already in escrow, just waiting to be close.
As you can imagine, the second one will be more attractive to the home seller, since it has a high percentage of success.
So if you’re trying to purchase a home in a strong seller’s market, your best bet is to submit a non-contingent offer, or find a way to make a more competitive offer (usually by raising your offer’s dollar amount) in order to have a greater chance of having your offer accepted.
It’s very tricky to negotiate two closes in parallel. Though its possible to have a simultaneous close, you do need to have all dates aligned, and use the same escrow company for both transactions for the process to work..
In case you do end up selling your home before you buy a new one, you have to consider where you would live in the meantime. Would you get short-term rental, stay with friends or family, stay at a hotel, or negotiating a rent-back with your home buyer?
And what about your possessions? Are you going to keep them in a storage facility, or at a friend’s home? Or would negotiate with your moving company so it can store your items for some time?