Wednesday, September 16, 2015

It’s Stressful to Buy a Home When You Have to Sell One First



[Published Sept. 17, 2015, in the Jeffco editions of the Denver Post's YourHub section and in four Jefferson County weekly newspapers]
 
This seller’s market has been going strong for two years now, so I’ve had plenty of time to practice the art of selling one’s current home without rendering the seller homeless.  Not everyone has the luxury of being able to buy a home without having to sell a home first. Even then, it can be hard for the seller to buy a replacement home when there is competitive bidding for each new listing.


Add to that the stress of having to be out of your current home by the closing date without knowing what home you can buy.  We can’t eliminate the stress, but let me share a strategy that has helped several of my clients succeed when facing this dilemma.


The key is to sell your house to the buyer who can give you the flexibility you need to find your replacement home. You can only do this when you have multiple competing buyers.  Some listing agents put in the MLS “contract contingent on seller purchasing replacement home.”  That’s not my strategy, since it reduces the number of buyers competing for your home.


My strategy is to price the house to attract multiple buyers. This can scare a seller into thinking they’ll sell the house for less than they should, but that only happens if you take the first buyer who makes an offer. You may lose out if you sell your home with less than three or four days on market.


Don’t try this by yourself. You need an experienced agent — a Realtor — who knows how to negotiate multiple offers.  If you get enough offers (which you will, if you price the home at slightly below what comparable homes sold for), one or more of those buyers will agree to match the highest price and agree to post-closing occupancy or a rent-back by the seller until you can get under contract and close on your own replacement home. 


The one time that this strategy failed for one of my clients was when we settled for a 20-day post-closing occupancy instead of holding out for a more flexible or indefinite occupancy to allow for the difficulty of being the winning bidder on the buy side.


Having multiple offers can also allow for negotiating the inclusion of other provisions that would be hard or impossible to negotiate with a single buyer. For example, twice this year I had sellers with furniture to sell outside of closing. We put a price list on the kitchen counter and awarded the contract to the buyer who agreed to buy all the furniture at the specified prices.  My sellers were delighted that they didn't have to have an estate sale or garage sale or deal with putting their furniture on craigslist.

For the seller who wants to buy and can do so without making the purchase contingent on the sale of his current home, the process can be reversed.  This client wants to sell his home but only if he can buy the perfect replacement home.  Once I establish that this client will price his home to sell quickly and that the market in his subdivision is still strong, I help  him or her to buy that perfect home and then quickly put his home on the market.  With the right pricing, marketing and negotiation, we can get the home under contract -- again with multiple offers -- selecting the buyer who is able to accept the perfect closing date to meet my clients' needs. 





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