Most of the time a client asks that question, what they really are asking is whether they can make an offer on a new home contingent on selling theirs. In most markets the answer is a definite, "No". Rarely will everything align to make it reasonable for a home Seller to accept an offer that has a home-to-sell contingency. That would just give total control of the sale of the Seller's home to the Buyer, with no guarantees and with no ability to accept another offer.
Here are the most common ways a Seller can sell their home and buy another. Almost all of them have some good features and some not so good.
- Find the new home and write an offer to buy it with cash. Then sell your current home. This is a non-contingent offer that requires you to have sufficient cash on hand to buy the new home. For those able to do it, this has many great advantages: you have a better chance of your offer being accepted; you can take your time moving out of your current home; and you don't have the problem of losing the house you really like because you don't have your home on the market yet.
- Find the new home and write an offer to buy it with a loan. Then sell your current home. This is a non-contingent offer that requires you to have sufficient down payment cash on hand and the income to get the loan. If you have a loan balance on your current home, you must have enough income to qualify for the new loan and continue making your current home's payment. This is almost as good as option #1 except that it often produces some anxiety about making two house payments.
If you are over 62, you might have an option of using a Reverse Mortgage to buy the new home. This option has some special requirements, so we definitely need to talk about them. - Put your home on the market to sell, and then write an offer on the new home when yours is Under Contract. In my experience, this is the option most move-up or move-down clients have to choose. They don't have the cash or the income to buy a home without having theirs sold first. It does allow you to write an acceptable offer though, even if your home is not closed yet. Most Sellers will accept an offer contingent on the closing of a property that is Under Contract and due to close at a reasonable date. Sometimes they require that your contract is beyond the inspection contingency date, however.
What I generally do in this situation is start looking at homes to buy as soon as we put your home on the market. This allows you to find the neighborhood where you want to live, and to identify one or more homes that you would like to buy. Then, once an offer on your home is accepted, we go back to those homes you have pre-selected and that are still available (along with other new listings in those areas). - Buying a new builder's home is a different situation. Unless the builder has an inventory home that you like, you have to plan to get your home sold before the new one will be available. This generally involves selling your home, living in a temporary home or apartment, and then moving into the new home when it is completed.
This is very common for new builder home buyers because the builders will require a non-contingent status in their contracts. At some point in the construction schedule, they will require you to either have your home sold and closed or to sign a waiver of contingency. That means you agree to proceed with the purchase of the new home and you can demonstrate that you have the resources to buy it even if your home doesn't sell first.
Every situation is unique, so if you are thinking of moving that will likely involve selling your home and buying another one, call me. I can help you work through all the options open to you. For all my contact information, see www.antleproperties.net.
