The Age Old Question: Should We Sell Our Home First or Find Our New One???
List/Sell First or Purchase First?
This is a question that I get asked often by clients. Should we list our house first and then go searching for homes, or should we find a home and then list our home? The answer is: yes. Actually, my answer is reframed as question back to my clients. I probe deeper into the reason for your move. Could you find a short term rental, if necessary? Can you afford to carry 2 mortgages? How broad or narrow is your criteria for your new home? Once I have a better feeling for your motivation, what you need out of your sale, and how well your current home will show with you living there, then, and only then, can I give you my opinion. Ultimately it is up to you, but from what we discuss, you -my sellers- and I can usually come to an agreement on the best strategy.
Here are two recent examples; the first made sense to purchase their ‘dream home’ first and then sell their current home. The second made no sense to purchase unless they sold their current home. As I’ve repeated constantly, each client gets an individualized prescription and detailed analysis after, and ONLY after, we have met and I’ve gotten to know your motivations, desires, tolerance for stress, etc. No two families are the same, and my advice is never the same to different clients. Your move is too stressful for me to come to you with a canned script, a lame Power Point listing presentation, or a One-Size-Fits-All strategy. That would be a disservice to you. My philosophy is to listen, and then I will guide you through the process.
The first clients had come to me about 6 months ago and said they were ‘starting the process’ of getting their house ready for sale and wanted to know the process. I laid out a plan and strategy, but with a toddler and 2 large dogs in a row house I knew showings and keeping the house clean would be difficult for my client. I also knew that my Stagers, Stacy and Sharon, would have a detailed list for the sellers so that the house would show well. They put off listing for a few months and then out of the blue one day they said that they found their ‘dream-home’. This accelerated the process of moving and now put it on the front burner. They didn’t want to lose out on a home that was ideal for them and their growing family. Now came the delicate balance of figuring out how to put together a strong offer to purchase so they wouldn’t lose out. So we reconvened and figured out that they could afford and would qualify to purchase their new home without having to sell their current home. This relieved some stress because they did not have to have a House-To-Sell Contingency on their new home. This also would eliminate a major hurdle in getting into their new home.
Everything went smoothly with their purchase, and during this time we were preparing their home for sale. We had our punch-list: paint the metal roof, interior painting, de-cluttering, staging, cleaning, moving most of the furniture to the new home, etc. Once they settled on their new home and moved in we had Stacy and Sharon out one last time to Scientifically Stage their home. So far these clients, it worked out much better, to purchase first. They didn’t have to worry about showings with the Dogs, and Toddler, and cleaning every morning before they left for work. Picking up toys and crating the dogs DAILY. There is a lot that goes into properly present a house, and being able to eliminate that daily stress was worth it to these clients. They were able to do the work once instead of daily so that their home showed like a model. With these clients, it made perfect sense to go ahead and purchase their new home, get moved, settle their growing family and then worry about selling their current home.
The second example was different; this couple also had a growing family and wanted to ‘move-up’ from their starter home as they were expecting their first child. When we met to discuss the process of selling and how we bring in Stagers, a professional photographer, and a professional cleaner to help present their home in the best light, they were 100% on board. They recognized the benefits. I explained how Annie can visually tell a ‘home’s story’ through photographs and that over 95% of buyers now start their home search on-line and that their home and the pictures must POP. These guys did everything to a T, and their home truly showed like a model!
When we got down to talking about what they would like in a new home (size, location, lot, bedrooms, amenities, etc.) they were pretty laid back. I knew that finding them the correct home, based on their criteria, would not be overly difficult. We then discussed finances, down-payment on their new home, and their risk-tolerance. After a thorough review of their finances and their current loan, we determined that it would not be smart for them to have overexposure to the market. Plus most of their down-payment for their new home would come from their current sale.
We decided that the best strategy would be to go ahead and list their home and get it sold first. From this sale, we would know exactly what they would have to put down on their new home and what they could afford. The profit from selling was the #1 factor in what they could purchase in their desired location. For these clients, unlike the first couple, it made more sense to go ahead and get their house sold- under contract- before starting the buying process.
So to answer the question: Should we sell our home first before buying, or buy a home first then worry about selling? It depends… Only after an in-depth analysis of your particular situation can we make a determination about what is best for you and your family.
Next month, I’ll discuss Pre-Listing Inspections… Stay tuned.