Finally, A Way To Avoid Contingent Offers

A huge issue affecting the real estate market ever since the Covid pandemic is the historically low inventory issues that we’re in, there are just not enough homes for sale compared to offset buyer demand, resulting in a huge seller’s market. 

If you are a potential home buyer but also have a house to sell, we’re going to talk about ways to safely navigate this hot sellers market to make the buy and sell process go much more smoothly and stress free, right after this.

When I speak to new potential clients, the most common roadblock I hear that prevents them from wanting to list their home and go buy another home is:

If I sell my house, where am I going to move to?

Buying and selling is an extremely complicated process. It’s very hard to get things lined up perfectly. Having the right game plan is critical for success. 

No More Contingency Offers

First, let’s make sure we are on the same page. If you currently own a home, and you need to make a contingency offer to buy a new house, your offer will most likely not get accepted by the seller. So if you can’t get a mortgage approval to own two homes at the same time, you are at a huge disadvantage, and things probably won’t work out for you.

We can go into countless scenarios on why contingent offers don’t work, but here’s an example. Let’s say you have been wanting to buy a bigger house for your growing family, and you want to be in a particular neighborhood since it’s close to the schools you want. After months and months of patiently watching the market, the perfect house finally pops up and you go in to put in an offer. However, because you still own your current home, and you are not approved to own two homes at the same time, you have to put in a contingent offer. What makes it even worse is that the owner of the home that you want to buy asks if your home is even listed for sale yet? You say no, I still need to live in my home, but we’ll get it sold, trust me. Unfortunately, because the home you want to buy is such a nice home, there are 5 other offers on the table, so the owner quickly rejects your offer, and you are back to square 1.

Avoid Stress

This happens all the time for people out there. Can you imagine how terrifying it would be to put your current home on the market, get it sold, and you have to move out before you found your next home to buy? The idea of putting your family with the relatives, or liv ing in a hotel or AirBNB, moving multiple times, listen I’m sorry, that is unacceptable for most people.

The old way says that the only way you can buy a house, while still owning your current house, is if you can get approved for two mortgages at the same time. 

Is this the best way to buy first and sell second: yes, probably so.

Can most people actually do this? Probably not, unless they are extremely well qualified, have a huge down payment, and make plenty of income.

But the good news is, is that the mortgage industry is changing, and there are now a few mortgage lenders who will provide special financing options to allow a home owner to first buy their new home using non-contingent offers, and then they can have several months to get their old home sold. This solves many problems. 

First, you can get approved to make a non-contingent offer.

Second, you can be patient, and really take your time to wait on the perfect home to pop up to buy. Third, when you close on your new house, you can take a few weeks to a month to do renovations, and you only move one time, not temporary housing at the in-laws or a hotel. Once your old house is vacant, you can do the final touchups to make sure your old house sells for top dollar, and the best part is, since it’s now vacant, you don’t have to live in a house while it’s listed (avoid buyer showings, last minute unexpected showings, keeping the home clean like a model home). Vacant homes sells for more money faster than an occupied home. 

So if you are planning on buying a new home first, and selling second, here are my tips.

First, talk to a traditional mortgage lender to see if you can get approved to own two homes at the same time. If not, there are alternative lenders who can help.

These alternative lenders essentially provide a short term bridge loan to help you close the purchase, only provide a very small fee, and then you get your old house sold. All of this is based on how much equity you have in your old home, so unfortunately not all customers will qualify.

If you are considering buying a new home, and have a home you will need to sell, I am always available for a more in depth conversation. It’s very easy to jump on a call or get on Facetime or Zoom. This may be just an idea for you, but unless you take some sort of action, which normally just involves a quick conversation, then nothing may even change in your life. I’m about helping people, and if it’s something that you decide you may want to pursue, I encourage you to reach out. Thanks so much for your time today.