Should I Sell Then Buy or Should I Buy Then Sell????
September 23rd, 2007 Categories: Selling
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Here you sit knowing that the family is moving. You, your spouse, 4 kids, a dog and a hamster. You’re moving out of state and have to be there is 60 days to start working.
Do we go to the new area and start house hunting and buy a house contingent upon the sale of our Salt Lake House? Do we sell the Salt Lake House contingent upon going to new area and finding a suitable house? Do we sell the Salt Lake House and then just move, all our stuff is in a P.O.D. stay in an extended stay or with luck relatives (your luck, not theirs, 6 people 2 pets).
Price or terms, remember this statement.
Let’s look at the options closely so we can see how to navigate the decision process.
1. Go to the new area and house hunt, buy a house contingent upon the Salt Lake House selling. That depends a lot on a couple of things. What is the market like where you are going? Is it a buyer’s market, is it a seller’s market? Now let’s suppose it is a balanced market and homes are selling in 60-90 days. You make an offer on a home with the contingency and now you have to set a closing date. Hmm, the answer I don’t know, is not a strong position to negotiate from is it? You have become a weak buyer and for a full price offer the seller might be willing to do that and that just cost you 2-3%, or $6-12,000 depending on the price range. Now let’s suppose the seller said OK but they got their price and they want to be able to shop for back up offers. Low and behold someone else buys the home, now you have the house hunting to start all over again.
2. Sell the Salt Lake House contingent on going to the new area and finding a suitable home. Any buyer that is willing to pay you top dollar is motivated wouldn’t you agree? Remember when you were looking for a place to live how strong were you as a buyer. Now you are a weak seller. This may cost you a buyer or at best a few percentage points on the price. Now you fly to the new area and you look find a home and make an offer get it accepted and you do your inspection and order the appraisal (both paid for) and low and behold your Salt Lake sale falls through (why is not important in this study). That means you have to cancel the deal in the new market and start marketing your Salt Lake Home all over again.
3. This seems like the least of the three options because from an emotional point of view you are selling a house, you, your spouse, 4 kids, a dog and a hamster are homeless, that will test your sense of adventure. But let’s think about it. This scenario makes you the strongest buyer and seller of all the options. If a ready willing and able buyer comes along and has to move immediately you are in a position to accommodate them. But remember that statement, price or terms, if the buyer has to move right now. Whose terms are they, the buyer’s, if the terms are the buyer’s that means it is your price. Now you sold your Salt Lake House and you are in the new area flush with cash. You are looking for a house and you find and awesome House it is vacant and the seller would really like to close as fast as they could. Their terms equals your price again. Between the two transactions this option can be worth around $12,000-24,000 cash in your pocket. Yes there are going to be some expenses involved that might not have occurred otherwise. But it is a lot easier to negotiate when you can pick and go at any time and or close as fast or slow as a seller might want to.
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