What Do You Do When You Can’t Find a New Home When Your Home Sells?
Being in-between homes is more common than you think — and we have a plan if it happens to you.
At first, it sounds like a problem any seller would love: Your home sold after only days on the market. After all, the fear of a property lingering on the market, enduring possible price cuts, or low ball offers is what keeps many from selling in the first place. While a quick sale is a reason to celebrate, the challenge comes when it happens before you can find a new home.
This is an increasingly common situation in our current market, which remains hot due to the continued limited inventory that started in April 2020. Though inventory may increase in the spring selling season, there’s a conundrum. For every home listed, another home has to be bought. Until inventory outpaces demand, securing your next home might likely take a little longer than anticipated.
Still, the upsides of a speedy home sale outweigh the inconvenience of possibly being in-between homes: Less drama, achieving your asking price (or more), and being able to consider multiple offers to find the best buyer for your house. We can help you plan ahead by following these strategies before you list.
Ask about a contingency clause.
A home sale contingency is a clause in your contract that essentially states that you won’t finalize your home's sale until you find a new home. Ordinarily, buyers find such clauses to be off-putting because it creates a lot of uncertainty in their own timelines. However, when demand is very strong like it is now, there may be a buyer out there who has a more flexible timeline for their move. (For instance, a family in the market for a home but doesn’t want to move until the new school year starts). We'll discuss it together to see if a clause would make sense for you.
Consider a Loan Recast.
This option allows you to find your new home first, then sell your home. When you sell your current home, you then use your net proceeds to make a large, lump-sum payment toward the principal balance of your mortgage, and your new home loan re-amortizes. Which means lower monthly payments, and less interest paid over the life of the loan. If you have a low interest rate, that will stay the same, along with no double closing costs.
I recently partnered and became certified by Homeward, a company that is helping homebuyers overcome these challenges. With Homeward, I can help you buy your new home first with a competitive offer, move in on your timeline, and then list your old home when you’re ready. No need to show your home while you still live there, and no need for a contingent offer. That way, you don't put your current house up for sell until you find your new one. Homeward also ensures your old home will sell by offering a guaranteed floor price - this means that if for some reason your old home doesn’t sell within 6 months of moving, Homeward will buy it from you. This is extremely unlikely to happen, but it’s great peace of mind.
Consider a “vacation” rental or corporate housing.
No matter where you live, there are seasonal rentals to be found. While the seasonal vacation rental market is projected to pick up as travel rebounds following all that 2020 brought, these rentals weren’t going as quickly as annual rentals. In other words, there are more options to be found, often at prices lower than they’d traditionally go for. Look out for deals for off-peak rentals especially. Another option is corporate housing since they typically offer more flexibility as you settle into your new area. Both vacation rentals and corporate housing tend to be furnished, so if your furniture is in storage until you're able to buy your new home, you'll be comfortable the whole time. We have a list of short-term housing for times like these.
Hire an agent with connections.
When it comes to securing a new home in a limited inventory market, sometimes, it comes down to having an agent who knows how to leverage their connections. As your real estate agent, I'm prepared to tap into our database of potential sellers in the areas that you're considering buying. From there, we'll have conversations with each interested seller and set appointments to preview their home for you. If we can help find potential homes to showcase to you so that we're not only helping you sell your home but ensure that you can buy a home as well, we will.
When you’re putting your home up for sale, it’s easy to let anxiety take the wheel. The fear of selling your home before lining up your next home is one of those worries that commonly come up when the market is hot. However, it’s also one with a few easy solutions — and depending on your unique situation, we may have even more creative ideas. Need some advice? Let's connect.