Timing of Buying and Selling in a Sellers Market (contingency, cheapest, clause)

[Albuquerque101]

I am looking to sell my current home and upgrade to another home in the same market. The market is reasonably "hot" right now. It is not super-hot, but it is a seller's market with low inventory. Many homes that are priced right sell on the first day they are listed. Outdated and overpriced homes sit, though some homes sit with no identifiable reason. The last house in my neighborhood to sell went in a day, and there are currently no homes available in my neighborhood. I have every reason to believe my house (which is just as maintained and updated as the one in my neighborhood that recently sold) will sell quickly after I put it on the market.

I have no immediate need to move. We are simply looking for a little more space, especially in the back yard. We can be patient and wait even a few years to move (and it would not be a terrible thing if we stayed either). Since inventory is low, and we have a few specific target neighborhoods, we are just keeping an eye on them and will buy if something we want becomes available. No pressure.

All of that is well and good. However, there is something that is worrying me. If, for example, I find my "perfect" house, we are prepared to put in an offer right away. We are pre-approved, know what we want, and will pay asking for it, assuming the price isn't crazy out of line with the comps. We will, however, need a contingency for selling our house. In other threads I have noticed the sentiment that people think a buyer isn't ready to buy if their house is not already on the market. In my case, I can't put my house on the market now because I'll sell it without having anywhere to move to. I could get my house on the market in probably a week (do some decluttering, a deep clean, take pictures, etc.) and, as I said, realistically sell it in the span of a few days. Is that good enough? Or will I risk losing my "dream home" because the buyer is hesitant about my ability to sell my house (despite the aforementioned market conditions, of which they would be aware/we would tell them)? Would a clause in the contract that gives me a specified time to get my house sold/closed alleviate that concern?

One other option I have considered is to get my house ready to sell now, take pictures, get the listing ready, etc., and then have it on hold so all my realtor has to do is to push submit to get my house on the market. That way, when I find my dream home, we can push submit right before submitting the offer and be able to say that it was just put on the market in our offer. Would that make a meaningful difference to the people who would be weary about a sales contingency? Or is anything short of a pending offer/no contingency not good enough?

Obviously all of this depends on the seller's view of the world & personal circumstances, the exact market (ours is hot but not crazy hot), whether the sellers get other offers and how they compare, etc. However, I just wanted to get a sense from all of you about what you think of the issue generally. I will also be speaking to my realtor about this issue soon (she has not raised this concern with me, it is something I have thought of myself). I think my anxiety lies with the fact that I have one neighborhood I really want to get into, and only the cheapest 1/4 of that neighborhood is in my price range. So I am scared of missing an opportunity if the right house comes on the market (it's a highly sought after neighborhood).

[MrRational]

Originally Posted by Albuquerque101

I have no immediate need to move. We are simply looking for a little more space, especially in the back yard.
We can be patient and wait even a few years to move (and it would not be a terrible thing if we stayed either).
Since inventory is low...

However, there is something that is worrying me.
If, for example, I find my "perfect" house ...need a contingency for selling our house.

...have noticed the sentiment that people think a buyer isn't ready to buy if their house is not already on the market.

You're misreading those concerns.
If you have your financials are squared away and YOUR home is easily saleable... you'll be fine.

[Left-handed]

Originally Posted by MrRational

You're misreading those concerns.
If you have your financials are squared away and YOUR home is easily saleable... you'll be fine.

Our current seller's agent apparently made a fuss to my realtor that my house's sale hasn't closed yet. They were apparently concerned about it because their clients are moving out of state and really need their sale to close on time. But in my mind, nothing I'm doing is out of the ordinary. It is often the case that people sell their home to upgrade or downgrade to something else. What I'm doing is completely normal. Yet, somehow, it both surprised and alarmed them. Go figure.

Of course, this could all be fluff from my realtor to make it seem like he's going to bat for us and "saving our deal", but he did mention it to me this morning that it apparently set off some alarms with our seller. You'd be surprised what kinds of silly hang ups people tend to have when they feel that they have all the leverage. The fact that they even were concerned that my house sale hasn't closed yet (though it's set to close two weeks prior to our close) is indicative of how insanely frustrating it is to buy in a hot market.

[MrRational]

Originally Posted by Left-handed

Our current seller's agent apparently made a fuss to my realtor that my house's sale hasn't closed yet.
They were apparently concerned about it because...

And sometimes the sellers new choice has a sale contingency.
All sorts of things CAN happen... but they rarely do IF the house is saleable.

"If you have your financials all squared away..."

In a worst case scenario you'll qualify for some help:
Bridge Loan

[Left-handed]

Originally Posted by MrRational

And sometimes the sellers new choice has a sale contingency.
All sorts of things CAN happen... but they rarely do IF the house is saleable.

"If you have your financials all squared away..."

In a worst case scenario you'll qualify for some help:
Bridge Loan

Agreed with you that it probably all works out in the end. Just very stressful considering all the "what-ifs" until all the Ts are crossed and Is are dotted.

[BoBromhal]

very few lenders do bridge loans anymore, and very few people qualify for them. But bridge loans are indeed what we need.

Buyers need to be able to tell Sellers "I can buy your house without selling mine". PERIOD.

If you can't do that, you need to be able to say "My house is under contract and PAST the contingency period."

If you can't do that, you need to be able to say "We are under contract to sell our home, but during the contingency phase".

So you see how, as you go down the list, the risk to the Seller accepting your offer/situation increases?

Risk = more money if you're the ONLY offer. Risk = choose a safer offer from above you in the list.


Today, bridge loans: can you afford the new mortgage plus your existing mortgage, plus whatever debt you use (typically a HELOC) to act as the interim downpayment? And you need liquid assets = 6 months of ALL the debt payments combined.

Now, if you've got 20% of the new house in CASH, and are only counting the old mortgage payment plus the new mortgage payment, AND you still have 6 months of mortgage payments in liquid reserve - then you can get bridge financing.


So, step 1 is to find out who is doing bridge loans, and whether you qualify or not.

[caroline001]

Hi Albuquerque101,
Selling home quickly depends on the various factors like location and condition of the home, buyer interest, home price etc.
I think you should take advice from an experienced real estate agent.
Thanks!!