In a perfect world, you would sell your home and perfectly coordinate the closing date to coincide with the closing date on your new home. You would be able to get everything packed up and moved with only minimal stress. Unfortunately, in today’s wild rollercoaster of a real estate market, that does not happen very often.
The Challenges of Buying While Selling
In today’s real estate market, you may have a hard time finding a home you want to move into since there is not very much available, but finding a home you like won’t be the only challenge. Here are some other areas which may cause this process to be anything but desirable:
- Buyers Won’t Accept Contingencies: You have to show that you are able to afford the house you are trying to buy either in cash or through financing. Either way, if your financing depends on your current home selling first, a buyer in today’s market will most likely not entertain your offer. Sellers are looking for buyers who have a low chance of falling out of escrow. If you do not have money in your hand today, that makes your ability to purchase the home appear riskier. Plus, the seller would also have to trust that the buyer of your home has all of their finances in order and will be able to close on time. See, it gets pretty messy!
- You Can’t Find A House You Like: With limited inventory, it is hard to find a house you even want to move into. If you’re moving because you want more space, you don’t want to settle for something only a tiny bit larger than you’re living in today. Conversely, if you’re trying to downsize but can’t find a home that makes sense for you, you shouldn’t have to settle on a house that doesn’t work for you.
- Your Offers Aren’t Getting Accepted: In this market, it’s not unusual for homes in Washington to receive upwards of fifteen offers. These offers drive the purchase price way up. There have even been cases here in Washington where the price got driven up close to $100,000 over the asking price! It’s unreal. Not only are prices being driven up, but buyers are also waiving clauses in the purchase agreement like inspections and appraisals that are written to protect them. So while you want to buy a new home, you also need to be financially responsible. Is it really worth having to waive inspections and appraisals just to get into a new home? Is it worth coming up with tens of thousands of dollars in cash to beat out the next highest bidder?
This isn’t to scare you away from selling your current home and buying a new one; we just want you to be prepared. If you get creative and don’t mind being a little bit inconvenienced, you may still be able to take advantage of the equity you have in your current home while looking for a new one.
Short Term Rentals Options
One option you have is to move into a short-term rental after you sell your home. Short-term rentals like those you find on Airbnb or VRBO can be a great solution to this problem. Yes, you will end up paying a higher rental rate than you would in a long-term rental, but at least you would have a place to stay. These rentals usually come furnished, so you would need to rent a storage unit to store your large furniture items until you find a new house.
Going this route will make the home search and offer making process easier. You will already have the money from the sale of your house in your bank account, so your financing should be ready to go once you find the right house. If you’re really fortunate, maybe the increased property values have given you enough cash to buy your next home free and clear, which will make the process so much easier.
If the price is something that is really concerning to you, it’s understandable. If you’re able to reach out to the property owner and explain your situation, they may be willing to give you a discount. Short-term rentals were hit hard by COVID, and even though people are now starting to travel again, many property owners are in desperate need of income. Knowing that you will be in their property for at least a few months may give them some relief, and there is always a chance they will try to make a deal with you price-wise.
Rent Your House Back
Like we mentioned before, buyers are going to great lengths to have their offers accepted. As the home seller, you have the upper hand in negotiations. Something you could try is to rent your house back after it closes. This would work because the new buyers would close on the home and then become your landlords while you looked for a new home.
You would agree on a payment amount and pay rent to them for a specified period of time until your next house is ready to move into. There is a good chance they will ask you to cover their mortgage payment, which is likely to be higher than you are currently paying. There are legal risks, especially for the other party, so consulting an attorney may be a good idea. However, this could reduce stress significantly if the buyer will go for it.
Stay With Mom And Dad
This could be a scary idea, but maybe you could move in with your parents or other family members while you look for a new home. Chances are, they won’t charge you as much in rent as the other scenarios, and you’d be motivated to find a new home quickly. This will go back to having a hard time finding a house you like with limited inventory, but at least you won’t be getting charged a lot of money in the meantime.
We Can Help Too!
We don’t have all the answers, but we could at least help make this situation a little bit easier for you. Sound Home Buyer is a full-service real estate company in Washington. We will buy houses in any condition and can close in as quickly as seven days. We won’t charge you commissions, closing costs or make you cover any repairs. We can be flexible with your closing date and may be able to rent back to you after we close on the property. We understand the Washington real estate market, and if our offer to purchase your home isn’t what you were hoping for, we can list it for you on the open market and guide you through the process that way. Whatever you decide to do, just know in the end you will be glad you did. It may be a challenging, stressful couple of months, but this will be worthwhile as long as you make smart decisions. Give us a call or fill out the form on our webpage to talk to one of our agents. We can get you a cash offer in 24 hours and help you get this process started.