Sell Before Buying??
I was reading the Saturday morning real estate section from our local paper and the lead article was about move-up or scale-down buyers. The two agents interviewed both felt that they should sell first before they made an offer on another house. The problem I had with this article was not the position the agents had but the reasons they gave for doing so.
There are many areas in our marketplace where the purchase offer with a contingency of selling a house will not make any difference and will not affect the selling price that is negotiated. This is because the sellers are so glad to see an offer that they will readily accept one even with a contingency.
Unless a neighborhood has a shortage of inventory and is in high demand, most sellers, if properly advised by their agents, will accept a contingent offer. In our area, the listing does not have to be changed to reflect a contingent offer and no one knows it has an offer on it except the seller, that buyer and the agents.
This way, the odds are in the seller’s favor, because now there are two houses on the market and if either one of them gets an offer, the seller is good.
So why wouldn’t a buyer make a contingent offer? Yes, there is the possibility that another offer could come into the picture and they would have to do a bridge loan to keep their offer or they would lose it. But generally, if they price their house properly, de-clutter it, and then stage it, the house will sell fairly quickly. To wait until you have sold your home, to then start looking, you may not find something suitable and you will have to move twice, first into temporary rental housing and then into your next house. This would far out weigh the cost of carrying two mortgages for a few months.