A guide to understanding the different options available to you.

There are a few ways to go about it.  Each has their positives and negatives and come with a fair amount of stress.

1. Sell your home first. Negotiating a long close date and the ability to rent back from the purchasers for a few days. Then find and make an offer on your new home, subject to the sale and CLOSE of your existing home. Both transactions should close simultaneously or at least within a day of each other.

   DRAWBACKS: Finding a new home in a fairly short period of time. Can you find something you like quickly?  The fear here is that you’ll end up homeless or renting an apartment to bridge the gap between getting into your new home.

2. Make an offer to buy your new home subject to the sale of your existing home. Negotiate a quick close on the sale of your existing home and a long close on your new purchase. Add the provision for the ability to rent back from the purchasers for a few days. You may end up needing to offer the seller a “nice” price to entice them to take your contingent offer. You’ll need to price your home to sell quickly. Again, both transactions should close simultaneously or at least within a day of each other.

   DRAWBACKS: You could lose your “dream house” if your existing home doesn’t sell in a timely manner.

3. The combination: Put your house on the market, priced competitively, with the listing subject to you finding suitable replacement housing. Shop for your new home. If you find your new home before your home sells, make a contingent offer on your new home and consider reducing the price on your existing home. If your home sells first, accept the offer subject to finding suitable housing. Most buyers will want a deadline by which you plan to find replacement housing. Buyers may want to be reimbursed for any costs should you not find something and do not sell to them.

   DRAWBACKS: Lots of contingencies.  People who need to know what is going on at any given moment don’t do well with this option.

All offers to purchase will be made subject to a satisfactory home inspection at your expense, subject to a clear title and subject to you obtaining financing for your new home.

In all cases you will want to do the following to prepare:

• Secure your down payment funds. Be sure to have a solid paper trail of where your down payment came from. Lenders want to know the money is legit.

• Meet with a lender and get pre-approved. Be sure to discuss your whole financial picture so your lender has a chance to fit the best loan product. Consider looking into the possibility of bridge loans and buying without selling.

• Chose a Realtor with whom you plan to list your house. Get a realistic list/sales price so you know how much you’ll net from the sale of your home. Your lender will need this information as well.

If you have any questions about these options, feel free to give John a call @ 503.467.9997.

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