Dear Anderson Group,
My husband and I would like to find a bigger home for our growing family. Our wish list includes a better floor plan, finished basement, larger yard and we’d love to be able to walk to town. We need the equity out of our current home to be able to buy something new. However, we’re happy enough in our current home for now, so we don’t want to list our house until we find the perfect new house. A friend told me this will put us at a competitive disadvantage against other buyers. Is this true?
In our opinion, your friend is correct. If you need to sell your current home before you can buy a new one, (which is an extremely common position), any purchase offer you make will include a “home sale contingency”. Depending on market conditions and the seller’s motivation, they may or may not accept your offer with this contingency. Even if they do, you will be required to get your home on the market within days of acceptance and still run the risk of being displaced by a non-contingent buyer. A more strategic option would be to get your house on the market first. This shows sellers you are serious about selling your home and are more likely to be able to complete the purchase of their home if they accept your offer. Once you are under contract on your current home, any offer you have made would shift to a “home close contingency”, which is a stronger position. We will then work to align closing dates to ensure the transition is as smooth as possible.
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