The same conversation happens with just about every client who is thinking about selling:
“How can we do this so that I don’t have to move twice? Is there any way to make it work so that we can sell and buy at the same time?”
If you are like most people, when you sell your home, you need to find your next place to live at the same time. It can be an intimidating process to consider, especially if you have never done it before. (And I know there are a lot of you out there who bought new construction for your first home, so this might be the first time you’ve worked with a Realtor, too!)
The process tends to work best when you get your home on the market and under contract before you make an offer on the home you want to purchase. This puts you in a stronger negotiating position as it takes away some worry for the sellers of the home you want to buy–they don’t have to pull their home off the market to wait for your house to be listed for sale and go under contract. And you are in a better position to get the price that you want. (Although you can go the route of making an offer first and then having a home sale contingency, but in a seller’s market those offers are not likely to be accepted.)
The good news is that the way that our purchase contracts are written here in northern Virginia, you can actually use clauses in that contract to protect yourself through the transition. Afraid your home will sell too fast and you can’t find one you like? Yup, there’s a clause for that. Worried that the buyer for your home might default on the contract and you’ll be on the hook for your new home? Also a clause for that. Depending on your personal situation and goals, we can utilize different pieces to make sure that this is stress free and (most importantly) doesn’t obligate you to more than one house at a time, unless that is part of your plan.
(I’m going to explain how these clauses have worked for our clients, since in Virginia we fill out the contract forms on behalf of our clients, but please note that I am NOT an attorney nor am I providing legal advice. If you would like the name of a few different attorneys that specialize in real estate, I can provide a list for you.)
The Home of Choice Contingency: “Hang on a minute, I need to find a home before I say yes.”
This clause is for when you get an offer on your home, and you want to ensure that you’ve found a home to purchase before you sell your current home. Officially titled “Contingent on the Seller Purchasing Another Home,” it gives you a period of time (typically a few weeks at most) to ratify a contract for the purchase of your next home. If you can’t find a home you want to buy in the specified period of time, you simply deliver notice to the buyer that you’d like to void the contract. This clause is included in the contract to purchase on the home that you are selling.
The Coinciding Settlements Contingency: “I’m not buying this if my house doesn’t sell.”
This clause is used for your purchase contract, and is titled “Settlement of Buyer’s Property”. It states that your purchase is contingent on the settlement of the contract to purchase your current home. Meaning, if something happens and the contract on the home you are selling falls out (becomes void), you are not required to purchase your next house. You can declare your purchase contract void at that point.
Of course, if you want to buy your next home before you sell your current one, that could be an option, depending on your financial situation and how you want to manage the process. Talking through the options with a lender could allow you to use special financing options that would give you that flexibility to purchase before you sell. If you are interested in exploring those options let us know and we can put you in touch with several different lenders to compare programs.
Hopefully this helps demystify how a potentially complicated process can be simplified to minimize your risks. If you are thinking of making a move and want to talk through how we could help you make that work, please reach out. And if you have any questions on the process, that’s what we are here for!