Whether you are moving for a job, more space, a nicer place, across town or cross-country, it’s stressful. I’m not saying it “can be” stressful, I’ve been through it over 2,000 times just as facilitator, and the only “can be” is that it can be brutal for me and, therefore, must be excruciating for some. Fortunately for realtors, folks soon forget pain, families get bigger and the grass keeps getting greener, so agents aren’t going to starve any time in the foreseeable future because people stop moving. And there will always be people who need to shop for their new home while they’re trying to sell their current one.
One of the key elements of a simultaneous sale/purchase is a “home sale contingency.” A non-starter for most D.C. deals, the home sale contingency allows a buyer to put a contract on a home with the condition that they need not perform on the contract unless their current home sells within an agreed upon time frame. This scenario is not typically desirable for any seller unless they are unable to attract other ready, willing, able and house-free buyers.
The reverse of this contingency is called a “home of choice contingency,” which allows a seller to accept an offer under the condition that they need not perform if they are unable to secure a home of their choice within an agreed upon time frame. While this is a little more palatable to buyers than the home sale contingency is to sellers, it can create hesitancy in any market.
But depending on your circumstances, your options vary:
- Moving cross country? No problem. All you have to do is act as if you are moving immediately, even if your actual move is weeks or months away. If it’s spring, throw out all of your winter clothing and vice-versa. In fact, and this goes for anyone selling a house, throw out anything you’re not taking with you and store everything else that your agents would like out of the home. With luck the market where you’re moving is more buyer-friendly and home sale contingencies more acceptable. Since your agent will want you out of your house to market it anyway, the more house-hunting trips you take the better.
- Staying on the Hill? Here’s where it gets tricky. I haven’t seen a home sale contingency on one of my own listings in ages, but again, it’s all about acting as if. Once you determine that the size, type, and location of the home you desire is attainable as soon as the funds in your current home are available, you simply start preparing and set the calendar for your listing, all the while keeping an eye on your purchase market. In most cases, if all fails, the worst result is a quick trip to Target to replace all the toys you threw out.
- Buyer flexibility is the key. If your home is priced right and presented well, particularly in a seller’s market, lease-backs (sellers remaining in the home following settlement) are common. Some lenders have restrictions on the amount of time before a buyer must move in, but 60 days is by no means out of the question. This 60 days, when added to a 30- to 45-day settlement, gives a seller three months or more to contract on a new home so long as a “coinciding settlements” contingency is included for safety in the event your contract to sell falls through near the end. Not bullet-proof, but still much more palatable to a seller than if your home hadn’t even been listed.
Of course everything you just read assumes that the majority of the funds you’ll need to buy your new house are tied up as equity in your existing home. But it’s unlikely you would start the process of buying a home without speaking to a lender, so why would you do the same without acting as if you are going to market?
The worst that could happen is a ridiculously clean house…
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of HillNow.com.