Expert Homebuying Advice
6 reasons why you should sell your home before you buy a new one
With an extreme shortage of properties for sale, many North Texans worry they will sell their current home before they find a new place to buy. This “homeless” phenomenon tends to put a stalemate on the overall market, because we need inventory to get the wheels moving.
The natural sequence in the home-buying process is to list your current home while you search for a new one to purchase. Selling usually takes a few months; however, in today’s hot market, homes are often under contract within a week or two and closing within 60 days.
When is the best time to sell? It happens to be right now, in the early part of the year.
Supplies of homes in a normal market are around six months, but today, the supply is around two months, which means that homes are closing very quickly — about two months on average.
Bottom line: It behooves you to sell your home before you buy. Still need convincing? Here’s a list of reasons why:
Applying the equity
Most homeowners need to sell their home before purchasing another one. They need to apply the proceeds from the sale toward the down payment for their next home. In other words, the sale is necessary in order for there to be a purchase.
There is no certainty that your home will sell immediately. It doesn’t make sense to contract for a new home without serious interest for your home – unless you don’t mind owning two homes at the same time. So it is wise to offer it for sale while you shop.
Being in control
If a seller is concerned about the sale happening too fast — before the new home has been secured — Realtors can help with a variety of solutions. If you as a seller can sell your home quickly, you are in control, and you have added leverage in the negotiations.
Keep in mind, offering your home for sale doesn’t mean that you have to sell it. If offers come in quickly, and you haven’t found a home to buy yet, consider negotiating a higher price or more favorable terms.
The process of selling needs to come first. If your home sells before you find a new one, ask for a longer window to close on your current home and allow more time to find the right home to buy. Or, if you want your money quicker, close on the sale of your home sooner and agree to a temporary leaseback, which permits you to stay in your home for an additional month or two while you find a home.
Remember the bridge loan? Lenders are once again loaning temporary funds called bridge loans to strong borrowers. It serves as a down payment for your next home until you are able to sell your current home. Once you sell your home, the bridge loan is paid off from the proceeds of the sale.
Taking advantage of the market
When is the best time to sell? It happens to be right now, in the early part of the year. In moderate climates like Texas, the spring market heats up as early as January, as homebuyers enjoy sunny afternoons to tour open houses. Home sellers can often achieve a premium price this time of year, because demand is high and there are fewer houses available than there will be in the spring.
Home selling and buying naturally progress concurrently. Realtors are experts at facilitating the timing of the events, so let’s get the houses on the market and start shopping!
Dave Perry Miller & Associates is a premiere residential real estate firm with five locations that specialize in marketing the key areas of the Park Cities, Preston Hollow, Uptown, Lakewood, East Dallas and Kessler Park. Dave Perry-Miller & Associates is a member of Leading Real Estate Companies of the World and Luxury Portfolio International. For more information on luxury living, please contact Dave Perry Miller & Associates at 214-369-6000. Also visit daveperrymiller.com/blog for the latest news in Dallas real estate.