Buying Time to Buy in a Seller’s Market
If you’re lucky, you can afford to buy your new house without selling your current house. But unfortunately, that isn’t the case for most people in the real estate market. Many buyers will therefore have to make an offer that is contingent upon the successful sale of their current home. In today’s competitive housing market, that could pose some challenges when buying the home that you want – but it doesn’t have to.
Let’s say you’ve worked with your Realtor to find a Portland home that suits your needs, is in great shape, and is priced at an excellent value. You’ve hit the jackpot! As long as you can sell your own house, you know you have the proper funds to purchase this new one. But, your offer is one of six, which isn’t uncommon for this buyer-heavy market. When the seller looks at your offer, they will wonder “What if we accept this offer, and it turns out they can’t sell their house and the deal for our house falls through?” Most sellers don’t want a contingency offer, and if they don’t have to take it, they won’t. So how can you make your offer more appealing?
Possession Prior to Closing
When you are faced with the catch-22 of not being able to close on your current home (even though it is under contract) before closing on the new one, it can seem like a financial impossibility. One way to offset the burden is to draw up a rental agreement where your buyer moves in early and pays rent before they actually purchase the home. This works well to help offset your mortgage on the new home during the time when your current house would have otherwise been sitting vacant. It’s paramount that you and your Realtor understand who your buyer is, their circumstances, and that they have the funds necessary to purchase your current home. Be smart and make sure you know you have a qualified buyer.
Possession After Closing
If your home is set to close sooner than you can buy and move into the new one, it can be stressful to try and find a place to live during the in between time. No one wants to have to move twice! One way around that is with a rent back agreement. Sell your home, and draw up a rental agreement with your buyer where you pay them rent and continue living in the home until an agreed-upon date. No moving twice, no worrying about trying to expedite the purchase of your new home. If your buyer has a more flexible timeline, this is a great way for them to secure the house they want at a good rate while allowing you some wiggle room in purchasing your new home.
Ideally, all parties involved would be flexible when selling your home and moving into a new one. If only that was always the case! Special circumstances can really complicate real estate transactions, but by working with your Realtor it’s possible to find a solution that will help you get what you want. Ask questions, think outside the box, and be as flexible as your situation will allow.
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