You either need to move or simply want a new home. You need to sell your current home before you can buy the new home. You are afraid that your home will sell before you can find a home and you don’t want to be homeless. You probably know that our real estate market in Brevard County has been a little crazy the last few years. You have seen prices rise at a moderate pace. You are seeing homes sell in under a week. You are seeing homes receive multiple offers. You are seeing fewer homes in an area you want in a price point you want to stay within. What can you do???
First thing, always talks to your lender. See what you are qualified for. See if there is a possibility of buying a home without having to sell your home first. You will also need to make certain you can carry both mortgages for a short timeframe while you get settled into the new home and focus on getting your current home on the market and sold. This is a good time to consider if you would like to make your current home a rental property. (Our rental market is even crazier than our home sales market. Read more about that in this article) Why are rent prices so high?
If you need the money from the sale of your home for the new home or being responsible for two mortgages and taking care of two homes is not your ideal situation, here are a few options.
Look at new construction. New homes are taking at least 6 months to build (8 to 12 months is a timeframe I have been seeing lately) This will give you plenty of time to market your home for sale.
Put your home on the market for sale and ask for an extended closing period (an extra 30 days) on any offers that come in on your home to allow time to find a home once your home goes under contract. Close on your current home and on your new home on the same day (or within a couple days)
Become a tenant. Look for a rental property to move into so you can take your time finding the next home. This could also give you time to have any work done on the next home without living in the property. Painting is easier. Replacing flooring is easier. If you are doing anything major (updating kitchen, updating the bathrooms, or gutting the place) you do not have to live in the mess while the work is being completed.
Put an offer on a home contingent on the sale of your home. You will go through the normal buying process (provide your escrow deposit, have your home inspections, apply for a loan, get an appraisal, etc). The contingency to sell your home by a specific date will give you time to get your home sold. It is recommended to at least have your home on the market for this to get accepted, it is even better if your home is on the market and under contract.
If an offer with the contingency to sell a home comes in on a home I have listed for sale, I will do my research on this property. If it is here in Brevard County, I will look at the comparable sales to see if the home is priced properly. If the home is already under contract I will want to speak to the buyer’s agent and lender to see where they are at in the process and make certain the time frame of the sale of that home works with the timelines of the offer being presented on my listing. If the home is listed outside of Brevard County, I will rely on that listing agent to determine if the price and activity being received on the home are in line with the market activity in that area.
Since some home sellers are not going to easily accept a contract that is contingent on the sale of a home, consider adding a kick-out clause; or plan on a seller countering back with this contingency. What a kick-out clause does is allow the seller to continue marketing the home for sale while you are working on your due diligence (home inspection, loan process including appraisal, etc). If another offer does come in on the home that is acceptable to the owner/seller, you will have 72 hours to remove the contingency to sell your home for the purchase of that property.
I have included copies of the two addendums we use with our FAR/BAR contracts here in the state of Florida so you can see the verbiage. (I can email you a pdf that can be a little easier to read)
If you are curious about the actual contracts used, I did an overview of the FAR/BAR contract with the local real estate attorney and owner of the Title Company of Brevard, Michael Schneider in the video below.
I hope this helps with questions or concerns you might have in regards to needing to sell a home to buy a home. Yes, it is a little extra work and can add a little to the stress level of buying a property; but it is something that can be done and can be a viable option. If you have other questions about buying or selling a home, I would love to hear from you. Simply leave a comment below, send me a direct message, give me a call, send me a text, or send me an email. I can be reached directly at 321.795.1854 Eric@EricLarkin.com www.CocoaBeachInsider www.EricLarkin.com
About the author:
Eric Larkin is a Broker Associate with REMAX Solutions. He lives, works, and plays in the Cocoa Beach area. Eric has been helping buyers and sellers with their real estate needs since becoming a real estate agent in 2003. His focus is always on helping, answering your questions, and doing everything possible to make certain you have a smooth transaction from beginning to end.
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