It’s a pretty common conversation I have with homeowners: they’ve heard about the “bidding wars” on their neighbor’s homes. They gasp at the listing price of a home only to be shocked when it sells for tens of thousands of dollars higher. They want to get in on this. “So,” I say to them, “where are you going to go when your home sells?” The reason you are going to be the recipient of a spectacular offer on your home is that there are very few homes to buy. Once you sell a home, you are now a home buyer. And with a 15:1 ratio of Buyers to available homes, this often means you are temporarily homeless.
In last week’s House Call blog, we discussed the challenge of buying a home when you have a home to sell. The old contract staple: the “sale of home’ contingency is as rare as for sale signs in the yard these days.
So, what are your options if you own a home? Here they are:
- Buy without the sale of your home. Do you qualify to own two homes? If so, that is the way to go. You find your next home, then immediately list your current home. In the current sale environment, your current home will close within weeks of the new home avoiding double mortgage payments.
- Move twice. I know this is not a pleasant option, but it is very likely a necessity in this market. You sell your home, move into temporary housing (friend, relative, rental home or apartment) until you can find and purchase your new home free of any sale contingencies.
- Close on your home and negotiate a “rent back” from your Buyer. This contract trick allows you to live in your home (technically now THEIR home) while you look for a home. However, the Buyer’s lender will only allow this arrangement for 60 days. You may still have to move twice.
- Build a new home. If you qualify to buy without selling your home, you can time the listing of your current home to coincide with the closing date of your new home. This avoids a double move and the no-holds-barred free competition for existing homes. Even though you qualify to own two homes, the Seller’s market generally guarantees that your existing home will sell before you close on your new home. Keep in mind if you do not qualify to purchase the new build without the sale of your home the builder will require you to list your home within days of going into contract on the build ultimately requiring a double move.
Bottom line: the dark side of this great Seller’s market is that once you sell you are a Buyer. To “cash in” on the best Seller’s market in decades the Central Ohio homeowner must be willing to accept the challenges of being in the worst Buyer’s market in decades.
This Blog is written by Kathy Chiero, Lead Agent for The Kathy Chiero Group. Thinking of Buying? Get a copy of my free book “Ten Ways to Win in a Challenging Market” Visit us a OurOhioHome.com Ready to sell? Contact us for a no-obligation analysis of the value of your home.