{"id":2963,"date":"2016-08-09T11:11:57","date_gmt":"2016-08-09T18:11:57","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=2963"},"modified":"2016-08-05T21:02:25","modified_gmt":"2016-08-06T04:02:25","slug":"need-to-buy-a-house-fast-after-selling-yours","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/08\/need-to-buy-a-house-fast-after-selling-yours\/","title":{"rendered":"Need to Buy A House Fast After Selling Yours?"},"content":{"rendered":"<p style=\"text-align: justify;\">In fast-moving housing markets, many sellers worry that once they\u2019ve found someone to buy their place, they won\u2019t have enough time to secure another home for themselves.<\/p>\n<p style=\"text-align: justify;\">And some people \u2014 especially those with families \u2014 would rather not move twice before finding a permanent home, said Cody Anderson, a real-estate agent with Re\/Max in the Minneapolis area. Sometimes the fear of that scenario keeps them from selling altogether.<\/p>\n<p style=\"text-align: justify;\">One idea to bat down that concern: Add a seller\u2019s contingency to the contract that requires you find a new home of your choice to live in before closing.<\/p>\n<p style=\"text-align: justify;\">It\u2019s a cousin of a more commonly known contingency, one that home buyers add to a contract that requires they sell their current home before settlement. In competitive markets, as many are today, most sellers won\u2019t accept offers with this contingency \u2014 not when there are plenty of others that come with no strings attached.<\/p>\n<p style=\"text-align: justify;\">But in markets short on inventory, sellers have the upper hand, and may opt for a provision to ensure they won\u2019t end up without somewhere to live at the end of the process. Getting a buyer for your house first also helps you set your budget before you start house hunting.<\/p>\n<p style=\"text-align: justify;\">\u201cMost people are worried about what they\u2019re going to get for their home,\u201d Anderson said. \u201cWhy not figure that out in advance?\u201d<\/p>\n<p style=\"text-align: justify;\">Here\u2019s how it works: Anderson typically notes the seller\u2019s desire for this contingency in the agent remarks of the listing. Eventually, the contingency is worded into the contract, noting the number of extra days the seller wants to find his or her next home, perhaps 30 or 45 days.<\/p>\n<p style=\"text-align: justify;\">If after that time period the seller hasn\u2019t found a place, the buyer can back out. But he or she would have the option of sticking around if still interested in the property, adhering to the seller\u2019s timeline, he said. Turns out, there are many buyers who are fine with that stipulation, he said.<\/p>\n<p style=\"text-align: justify;\">For a deal headed to the closing table soon, \u201cthe first-time home buyers didn\u2019t even bat an eye,\u201d Anderson said. \u201cAfter a quick call with the buyer\u2019s agent, I sent her the legal paragraph we needed in the contract. She sent the offer an hour or two later.\u201d<\/p>\n<p style=\"text-align: justify;\">The ability for sellers to use this technique is dependent on the strength of the local market, said Ralph McLaughlin, chief economist of Trulia, a real-estate listings site. \u201cIn a very hot market, that is something sellers could get away with. Sellers are probably less able to do that in flat or cool markets.\u201d It also likely works best for starter or low-tier homes, where the buyers might be renters who don\u2019t have a home of their own to sell, and therefore have more flexibility on when they can move.<\/p>\n<p style=\"text-align: justify;\">Inventory shortage increases demand<\/p>\n<p style=\"text-align: justify;\">Increased use of the contingency is due to an ongoing inventory shortage, said Lawrence Yun, chief economist for the National Association of Realtors. In June, there was 5.8% less inventory than a year ago, according to NAR statistics, \u201cand one year ago, people said it was tight inventory,\u201d he said. NAR doesn\u2019t have statistics on how many people are using the strategy, but Yun said \u201cit\u2019s not a minuscule number.\u201d<\/p>\n<p style=\"text-align: justify;\">\u201cGiven the tightness of the market, people are coming up with creative ways and contingencies to move the market along,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">Still, there are some who caution that this strategy could backfire and scare away potential buyers \u2014 regardless of the market in which the home is located.<\/p>\n<p style=\"text-align: justify;\">Lynn Ikle, a real-estate agent with Redfin in Baltimore, advises against it \u2014 and would recommend her buyers not agree to a seller\u2019s contingency as well. \u201cYou don\u2019t know anything about this seller,\u201d she said. \u201cWhat if they\u2019re super picky, and then you\u2019re on hold?\u201d<\/p>\n<p style=\"text-align: justify;\">Instead, she recommends sellers ask for a rent-back clause if they\u2019re concerned about timing. That means the sellers have the option to live in the home after closing, and agree to pay rent to the buyers for that period. Usually, rent is the cost of the buyer\u2019s principal, interest, taxes and insurance for a month. In a competitive market, sometimes buyers offer the sellers free rent, to sweeten the deal.<\/p>\n<p style=\"text-align: justify;\">Of course, Anderson points out that there can be issues with rent backs, too. In a worst-case scenario, the seller doesn\u2019t want to leave the home after the rent period has expired, and has to be evicted. Still, with a rent-back strategy, buyers \u201cknow there will be a house at the end of the story,\u201d Ikle said. \u201cWith the [seller] contingency, it seems wishy-washy.\u201d<\/p>\n<p style=\"text-align: justify;\">Another strategy some homeowners are taking : Getting a bridge loan to assist with purchasing a home, prior to selling their original home, Yun said. \u201cThey can buy and have two properties for a short period, and then sell the property, knowing that there is strong demand. Once they sell the property, they can pay off the loan,\u201d using the proceeds of the sale, he said. Financially, it\u2019s a riskier scenario, because if it takes a long time to sell, the homeowner could end up carrying the bridge loan for longer than expected.<\/p>\n<p style=\"text-align: justify;\">But for some, the risk could be worth it, to win at the game of real-estate musical chairs \u2014 meaning they aren\u2019t left without a roof over their heads. \u201cPeople don\u2019t want to be the last standing when the music stops,\u201d Yun said.<\/p>\n<p><a href=\"https:\/\/www.msn.com\/en-us\/money\/realestate\/need-to-buy-a-house-fast-after-selling-yours-dont-panic-heres-what-to-do\/ar-BBv94mB\" target=\"_blank\">Need to Buy A House Fast After Selling Yours? Don&#8217;t Panic, Here&#8217;s What To Do<\/a> by Amy Hoak | MSN Real Estate<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In fast-moving housing markets, many sellers worry that once they\u2019ve found someone to buy their place, they won\u2019t have enough time to secure another home for themselves. And some people &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/08\/need-to-buy-a-house-fast-after-selling-yours\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-2963","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Need to Buy A House Fast After Selling Yours? &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/08\/need-to-buy-a-house-fast-after-selling-yours\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Need to Buy A House Fast After Selling Yours? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"In fast-moving housing markets, many sellers worry that once they\u2019ve found someone to buy their place, they won\u2019t have enough time to secure another home for themselves. 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