Why Sell Before I Buy

I’m afraid I’ll sell and have nowhere to go.” That’s what one of my clients said last week. I believe in giving my clients the information they need to make good decisions. So here are just a few reasons I gave them for why you should consider selling before you buy.

1. You will be in a stronger negotiating position on your sale. If you are already in contract on another house you love, you may feel pressured to accept a less-than-great offer. By selling first, you are in the strongest negotiating position on your sale – to negotiate for the highest possible price and the best possible terms for you – including rent-back and extended close.

2. You will know exactly how much money you have to buy the next house. In our market, some houses sell for more than asking, and others reduce their prices and sometimes sell below the reduced price. You don’t want to be caught short and have to withdraw your offer on your replacement house, or be stretched to make the new payments because the proceeds weren’t quite what you expected. You also want to buy the house that fits your needs best and the extra money you may make on your sale can affect your choices. Best to know in advance.

3. You will be in a stronger negotiating position on your purchase. Knowing how much money you have will make your offer “clean”, that is, not contingent upon getting an offer and then successfully closing it. Most sellers don’t like that kind of offer, wanting to know their buyer is actually going to be able to complete the purchase. A buyer whose house is sold with ready money in the bank is very desirable. Many of my buyers in that position have gotten the house they wanted for less than a higher offer – because they were ready and could offer better terms.

But where will we go when we sell?

1. You can often negotiate the ability to stay in your house for a certain amount of time after close of escrow in the purchase contract. Or you may negotiate a rent-back paying the buyer’s principal, interest, taxes and insurance for a short time. (PITI) If you are looking at houses while yours is pending and after the buyers have removed their contingencies, you will need to rent back for a few weeks at most.

2. Move to a short-term rental. There are several short-term apartments in our valley, where one can rent by the week or month, furnished and unfurnished. There are also “extended-stay” hotels, many of which also allow pets and have kitchens. There are options.

So, for a short inconvenience, you will be in a more powerful negotiating position, both buying and selling, and you will be in a more secure financial position as well. Win –win for you!