Saturday
Feb222014
What Comes First? The Chicken or the Egg?
Brian Donlyuk - Vista Filare Specialist
When it comes to making the move from one home to the next, the question is not “To Be or Not to Be”. It’s “What Comes First?” Do you shop for a new property first and put your current home on the market once you find one, or do you sell your current home and then look for a replacement?
If you have the funds and financial qualifications to move regardless whether you sell your current house, then you can go house-hunting at your leisure without concerns. Most people who are not first time buyers, however, have the cash for a down payment locked in the form of the equity in the property they currently own. They must sell in order to buy again.
Selling before you buy, or hatching your egg first
The advantage of selling your current home first is that you know how much cash you net from your sale, allowing you to write a more competitive offer to purchase. A challenge could be the timing of the sale. It is important to have a back-up plan for short-term living arrangements if closing is not concurrent or you cannot rent back for a short time.
I can’t be homeless; I must know where I am moving to! If this statement rings true for you, you may want to identify or purchase the next home before selling your current residence. With realistic expectations and a good Realtor to assist you, this sequence can be accomplished. It requires a bit more “tap dancing.”
Factors to consider when buying before you sell:
Some sellers will not take offers that are contingent on the buyer selling a property first, especially not if they received multiple offers.
Assuming you get your deal accepted by a seller who takes your contingent offer, you typically have a short time period during which you must sell your home or at least be in escrow. Don’t count your chickens before they hatch. If you make your offer based on an ambitious list price of your current home, you could find that if the actual sale price is lower you are put in a financial squeeze on your purchase.
Call Sylvia Jonathan at (714) 856-7003 and determine which scenario best fits your comfort level.
If you have the funds and financial qualifications to move regardless whether you sell your current house, then you can go house-hunting at your leisure without concerns. Most people who are not first time buyers, however, have the cash for a down payment locked in the form of the equity in the property they currently own. They must sell in order to buy again.
Selling before you buy, or hatching your egg first
The advantage of selling your current home first is that you know how much cash you net from your sale, allowing you to write a more competitive offer to purchase. A challenge could be the timing of the sale. It is important to have a back-up plan for short-term living arrangements if closing is not concurrent or you cannot rent back for a short time.
I can’t be homeless; I must know where I am moving to! If this statement rings true for you, you may want to identify or purchase the next home before selling your current residence. With realistic expectations and a good Realtor to assist you, this sequence can be accomplished. It requires a bit more “tap dancing.”
Factors to consider when buying before you sell:
Some sellers will not take offers that are contingent on the buyer selling a property first, especially not if they received multiple offers.
Assuming you get your deal accepted by a seller who takes your contingent offer, you typically have a short time period during which you must sell your home or at least be in escrow. Don’t count your chickens before they hatch. If you make your offer based on an ambitious list price of your current home, you could find that if the actual sale price is lower you are put in a financial squeeze on your purchase.
Call Sylvia Jonathan at (714) 856-7003 and determine which scenario best fits your comfort level.
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