Many times, people need to sell their current home in order to qualify for the purchase of their next home. This can be a tricky and stressful process so I wanted to share some things that I have found to be very helpful and successful in reducing the stress as much as possible. First and foremost, start talking to a lender about your best options. Sometimes, you will be able to qualify for a bridge loan or some alternative that will remove the need for a contingent sale.
What is a home purchase that is contingent on the sale of another home? It is an agreement to purchase a home with a clause that says that the buyer needs to sell another home in order to be able to complete the purchase. If the sale of the buyer’s home falls through or doesn’t happen during the timeframes of the agreement, then the buyer will be unable to purchase their new home.
If, after talking to a lender, you determine that your only option is to purchase a home ‘contingent’ on the sale of your current home – then consider the following tips:
- Please hire an agent that knows what they’re doing. Hopefully this goes without saying, but with multiple moving timelines and lots of paperwork, a good real estate agent that will advocate for you constantly and pay attention to all the details is absolutely crucial.
- Get a home inspection done on the home that you need to sell. This can be done up to 6 months or so in advance and will go a long way towards a smooth selling process. You can ensure that there are no surprise issues with the house and choose to repair anything that may be a problem to a potential buyer – which all contributes to a fast and smooth closing on the contingent home sale.
- Prep the home that you need to sell before you start looking at houses to buy. This might include things like decluttering, painting, landscaping tidy up.
- Work with your real estate agent to discuss pricing and strategy for the home you need to sell. Have everything ready, so that when you find the home you want to purchase, you are ready to hit the ground running.
- When you find the home you want to purchase and are submitting an offer, your real estate agent can include information on all of the above, showing that the contingent home sale is ready to hit the market asap and will also show that the prep work has been done to help it go smoothly. Usually there is a 5 (business) day timeline to put the home on the market so having everything ready ahead of time will go a long way towards getting your offer accepted.
- Be careful when accepting an offer on the home you are selling. This home sale is kind of like the foundation of the whole situation. It needs to be rock solid and have little to no hiccups so that YOUR home PURCHASE can also be completed.
Hope that’s helpful! Home purchases, contingent on the sale of another home are done all the time and with a little planning and the right advisors, can definitely help you make the jump from where you currently live to where you need to be!