I had an encounter this morning that questioned my approach to moving. We are looking for a house, and we will be putting our house on the market soon. When kind of depends on various things, but I'd rather find a house before putting mine on the market. I think mine will sell quickly, there isn't much in this area on the market, and it's a very high demand location due to schools and the train. We have no where to go if we sell first, so I'm not anxious to get mine on the market. My yard looks magazine lovely come May, but I know that's too long to wait to put it on the market, so I'm thinking in the next few weeks. We need to finish a few things, but we are close, and could be on the market in a matter of days if need be. I literally need one day to complete my projections -hubby might need two.
In any case, I know they say you should sell first, but where do you go if you don't find a house? Should we just sell and put everything in storage --man that would cost a lot- and move into a hotel?
How do you time buying a new home?
The women from my encounter this morning has sold her house and moved in with her parents. We are not welcome at my mom's house. My brother burned that bridge when he did his build. I may be able to stay there for a few weeks, but she would never accept us with no legally binding exit date :-)
There aren't a lot of houses on the market, and some are moving fast, and some aren't. I think there are a lot of people like me, looking and waiting.
We decided to get approved to buy without a contingency. It it for a reasonable amount, so if we find something, we can put in an offer and then sell.
You sell first.
Then you rent a house or apartment until you find the one you want to buy.
In the mean time, sell, donate, throw out everything you want to get rid of - clean out those closets, garage, basement, attic, shed, etc.
The less you have the less you have to move and/or store.
Most people time the sale and purchase to combine together and in a market that's fairly neutral like this, where there aren't bidding wars for houses and people aren't selling at desperation prices, you will more likely than not be able to make your offer contingent on the sale of your home. Then on purchase day, you complete the sale of your house in one meeting and then buy the next house at another meeting.
If you go get stuck for some reason, then sell your house first and move into a rental for whatever period of time you need. Your realtor should be able to advise you on the options in your area.
FWIW, we bought a house before ours was sold 7 years ago and will neve, ever do that again. Everyone under the sun assured us that we would be fine and that it was the right thing to do and then boom - overnight the lending market collapsed and the housing market fell immediately after (middle of 2006). Our competitively-priced house that was well maintained, in a desirable neighborhood where comps had been selling at 10% above our asking price in 6 weeks or less stayed on the market for 9 months. Our buyers were having issues getting financed because of the sudden drop in the mortgage market, people were panicking, and we finally dropped the price by 20% to sell at a loss. At that point our finances were in ruin from paying two mortgages for that long. We still haven't recovered from that decision. So...learn from me. It's never a safe move, you have no idea what external craziness will come along in the market, and it's not worth the risk. Better to live out of a suitcase for a few months.
I realize that your house *should* sell right away - but what if it doesn't? Or what happens if you accept a strong offer, you get 30 days into escrow, and the buyers can't get it to close? Then you'd have to start over, potentially at the time of year when there are a lot more houses on the market. At that point, it shows that your house has been on the market for 60 days, and people wonder why it hasn't sold, what's wrong with it, etc.
That being said, it is ALWAYS smarter to sell your house before buying another. I know it's a pain in the neck to do that, but you can always put your things in storage for a month or two and rent a furnished apartment. Yeah, it might be a bit more expensive, but you are not putting yourself in a place where you might end up having 2 mortgages to pay for several months.
I guess I'm just saying, plan for the worst. It will likely not happen, but why open yourself up to problems? Put your house on the market, and once you've accepted an offer and you've passed the first few hurdles of escrow (home inspection, termite report, etc), then put an offer in on the house you want to move into. You might be able to request a slower escrow (45 days) on selling your own home, and a faster one (30 days) on the one you're buying.
When we were building our first house, we anticipated that it might take a while to sell our current home because it was in 1992 and the Dallas area was just coming out of a "slump". So we put it on the market, hoping it would sell before the home we were building was complete and have the perfect timing for moving into our new home.
Whatever you anticipations are, you can be wrong. Our house sold to the first person who looked at it and we had 30 days to get out (they did not want to lease it back to us until our house was completed). We put the majority everything we owned into storage and moved into a short term lease apartment with only the things we truly needed. We went from appx 2000SF to 600SF for 6 months.
You can't count on a potential buyer to have all of their ducks in a row like some people do. Sometimes the inspection scares them off, sometimes they can't get loan approval, the appraisel may come in different that expected, sometimes their home does not sell, there are a lot of things that can go wrong.
When we were building our current house we put the first house we built on the market pretty soon after we broke ground knowing full well that we could be back in an apartment until the house was complete. This time, it did take longer to sell but nothing out of reach. The couple who bought it had to sell their home as well and we were on pins and needles not knowing if their house would sell so they could buy our house and we could move. We were looking at 2 mortgages at that time if our new house was ready and house for sale had not sold and closed when it did. Everything worked out well on that one because the other couple needed the extra time as well.
Around here, the housing market is booming now and houses are not staying on the market long. People are offering well over the asking price and paying cash to get the contract. THEN.... when things don't go their way, they back out of the contract leaving the seller back at square 1.
We just bought a condo for our daughter here in town. 3 people matched our offer. We got all the way to the asking price and then we offered cash. We got the contract, BUT... upon inspection there were a few things, albeit semi minor, we addressed to the seller. The seller told us they would not make any deals toward any repair and also said they wanted us to break the contract because another offer for CASH $10,000 more than our contract came in after our contract was signed. We stayed the course, got the condo and paid about $10,000 in repairs we felt were needed out of our pocket.
You do need an exit plan if your house sells quickly. Just hope you don't have to use it!
The wise thing to do is sell first because it gives you more control. Lending is a fickle beast. My husband as a realtor has seen more seemingly rock solid deals fall through at the eleventh hour than he can shake a stick at. It’s all fine and dandy until it’s you at the closing table with a deal that’s crumbling faster than wet sand. Once you sell, you know where you stand with your old house – it’s not your problem and you have the cash in hand – and house hunting for the new house is actually enjoyable.
We opted to sell first so we are going through what you are describing right now. I won’t lie; it’s stressful but moving is stressful under the best circumstances. Selling, being without a home with all your worldly possessions in storage and in the process of buying with small kids…well, that just adds a few extra bits of stress to a full pot.
We decided to sell first for two specific reasons. 1) Our market area is super hot and we wanted to be in a prime position to both buy and sell. 2) Our market area won't support contingency offers (contracts on the new house you want to buy pending the sale of your current home). We could buy without selling ours but financially we wanted the money from our current home to go towards the new home.
We put our house not quite ready on the market because it was a now or never situation. We could keep waiting for things like you mentioned - the yard to look pristine or all the projects to be complete - but we decided to list our current home. We have sold it already; from the time we put the sign out front to the closing which was yesterday was three weeks. Truthfully the worst part was trying to move out without a place to go and to get it all done within two weeks. We had already started packing for staging but it was still insanely difficult to get the remainder packed. Everything has gone in storage which hasn’t been that expensive in the scheme of things. We saved money by having my husband spend a lot of late nights moving things into storage. Also we had a Pack Rat (mobile storage unit) deposited on our driveway and filled over the course of a week. For us the biggest expense was the double move – having movers move us out of our house and into storage (cost 1) and then out of storage into the new house (cost 2, the same as cost 1). The double move cost drove our decision to move ourselves into storage. We will have movers but only on the back end – from storage to the new house. That was not an easy decision and without help from family and friends it would have been impossible. Looking back I might have more seriously considered sucking it up and hiring movers both ways. It was expensive but probably worth it in the long run. Oh well, it’s all out and in storage now.
At this point we are officially homeless but staying with my father who has reluctantly agreed to help us. He hates kids so it is a tense situation. We priced extended stays but they were all filthy and very expensive. I could stand the expense if they weren’t such rat traps. We looked in the best areas and they were still fleabags in my opinion. So if you do the extended stay thing, definitely have a good hard look at the one you plan on staying in. Hotels were prohibitively expensive in our search and short term furnished apartments didn’t exist as far we could determine.
We discussed two scenarios: what if our house takes ages to sell and what if our house sells immediately and we are scrambling to find a new house. Mentally we were prepared but believe me when I don’t think there is an easy answer. In hindsight I could argue we should have bought first and then listed. It might have been smoother but what the heck. It’s all a short lived process and with cash from our first home in our pockets we have real leverage power in buying our new home. Currently we are pushing to close on said new house in the same time frame as we bought – three weeks. By this summer we will be settled and it will be a distant, funny memory. Good luck.
The reasons to sell first are valid, & many people below have explained it well.
As for what to do once that happens, there are a number of options.
Hotel is one option, as you've already mentioned. Some do offer monthly stays, such as Extended Stay America, which are pet-friendly, & offer rooms or suites with full kitchens. Long-term rentals (by the week or month) are cheaper than the one-two night stay rates.
Corporate rentals are also an option - often offering furnished homes/condos for temporary rentals. See this link for info, & note that #18 mentions the category has expended in its initial scope to include clients such as relocating families:
http://www.corporatehousingbyowner.com/faq-renters
Additionally, you can search rental sites, such as Craigslist, & potentially enter into a short-term lease. Month to Month is hard to find, but 6month is common.
The benefits to a short-term renting option such as the ones above is that you can opt to move out of your house in order to list it "empty", rather than keeping it up for showings, and once your house sells & you are ready to move into your new home, you can take your time moving in. Depending on the option you choose, you can extend your stay for select periods of time.
Additionally, if you are 'waffling' between different areas to move to (this town or that one?) you can do a rental in the area you think you like best & give it a trial run, without the long-term commitment if you don't like it.
FYI, not sure where you are looking to relocate, or currently live ("Chicago" is a big area) but I do know of a spacious condo just north of the Loop, 2 min from I94 that is coming up on the rental market soon. You can message me privately if you would like more information.
Good luck, & keep us posted. I appreciate the learning experience being shared as you go through all the decision making in the process! T. =-)
Unless you can straddle two mortgages for 6 months to a year I would not take the chance (see JB's answer below).
It's a hassle to put everything in storage and find a temporary place but I'd rather do that than have two monster mortgages hanging over my head.
I've often wanted to move first myself (i.e., buy before selling). Our market has come back quite a bit so if we sold our house it might not be easy to get that next property without over-paying.
Urgh it's frustrating I know.
My sister is like you. She looked and looked and looked at houses for months until she found one she really loved. They put in the paper work that her home must sell before the would sign papers.
Her house sold in about 5 days. They signed the papers for the sale and the purchase on the same day.
You list and look. And pray.
Then rent & do storage, if necessary.
Are you using the equity from your home to buy the new home? If yes then you need to sell first to use the money to buy the new home. If no, then one option that many people do is if you sell your house before buying another house is to *rent* the house from the people you sell it to. You will pay there per diem rate.
My biggest word of advice to you is whomever buys your house, ask your realtor if the buyers lender is conventional or nonconventional. I would be VERY VERY leery of selling to someone who is using a nonconventional lender. I have seen way to many closings blow up at the closing table due to bad lenders.
Last fall we found the perfect house at a great price and quickly bid and got it with no plan for our house. Before we bid, though, I asked opinions here, saying pretty much the same thing - our house will sell quickly, yada, yada, yada. Most people told me I was crazy and asking for two mortgages and that it was not the way to do things. Like most people who ask questions on this page, I ignored the sage advice I was given, put in the bid anyway and panicked when it was accepted. Everyone told me it would take me more than a month to get my house ready - especially because my husband was unavailable to help me with anything. I ignored them, too. I had my house on the market a day under three weeks later, for about $10,000 more than the realtor expected to list it at (I had done that much work), and we had a bid in less than 5 hours at asking.
Follow your instincts.
Eta: by the way, we had about a week and a half overlap between closing where we had both places - having read the recommendations and horror stories about having nowhere to be between homes, I couldn't be more grateful that we had that time to move our belongings and refinish floors.
Put your house on the market first. The rest will work itself out. If you were to find you 'dream home' and yours for whatever reason were to sit......and sit...... the home you find will be gone. A lot of realtors will discourage you from putting an offer on a house until yours is under contract. All that is unless you have the means to float two mortgages... then by all means proceed.
We had the same concerns last year when we sold, just outside of Houston, our home showed 25 times in 9 days and we had a contract on it in 2 weeks.
It worked out, your situation will too but it will be stressful.
Cross that bridge when you get to it.
If you're pretty certain that your house will sell very quickly, make sure that your price reflects that. Inventory is pretty limited right now, so don't be afraid to price it accordingly.
If you happen to sell your house, you can probably get a rental home until you find your next home to buy, for something like $1800-2300/mo.
Our current tenants in our 3 bedroom/2 bath rental home in Naperville are there for 6 months because they just sold their house and are looking to move down South. Most applicants we had were in a similar situation of selling their places faster than anticipating and needing a place for a few months while they get situated. Heck, you could even rent a townhome for a few months and not have to worry about lawn care for the summer.
I'd check Trulia to see what kind of rental options you'd have.
I would put your home on the market first, and if you get a contract on it before you find a home, just put in the contract a mutually acceptable close date, one that gives you enough time to find and close on another house. You could also rent your own house that you have sold, rent it from the new owner for a few months, if they agree. That might be an option.
My neighbor sold her house, put her stuff into storage, and rented a furnished apartment on a short lease while she house-hunted.
The main question is, can you afford to own two homes at the same time? If not, then any offer you'd make on a new home would be contingent upon the sale of your current house. In a seller's market, that kind of offer is always going to come in second-place behind someone that is ready to buy immediately.
we put ours on the market, and it sold to the 2nd people who looked at it. our house search suddenly became a lot more serious, and we circled back to this place, which was on our 'maybe' list, and it looked ever so much better<G>.
the timing didn't work out, so we rented our little house back from its new owners for a month, and the sellers of this farm were fine with renting this back from us for a month so that everybody's circumstances could jiggle into place.
if you've got a good realtor they'll take care of that for you. it'll be fine.
khairete
S.
I scrolled through some of your responses, and well, I'm in the other camp. Last year, we were working on getting our house ready to list in the spring. I started looking at houses in January and wasn't finding anything, yet everything was going under contract almost immediately. (We live in the city and want to stay in our neighborhood, going from a condo to a SFH. A yard is a must with 3 young kids, and that was a major limiting factor in finding a home.) Rentals in our area for a space similar to our current home were 2-3x's our mortgage! Besides, we didn't want to move twice. We decided to not list our place until we found a home. Turns out we only just found a house last month, so it took us an entire year of house-hunting. If you think your house will sell quickly but you're having a hard time finding a place, think about those things (rent in a high-demand market, packing your stuff for a rental and storage, etc.). Make sure you can financially carry two mortgages and taxes for a while. No matter when you decide to list your home, if the inventory is low and houses are going under contract right away with multiple offers, you will have to make a non-contingent offer on a home to make yourself an attractive and competitive buyer. Good luck!
