Homeowners who are planning to make a move wrestle with the dilemma of how to get the home sold so that they can purchase a home. Which comes first depends on the market — is it a buyer’s or a seller’s market — and your personal motivation. However, for most sellers and buyers, the smart thing to do is to sell before you buy. Currently the Baton Rouge real estate market has several months of inventory that is not selling right away and buyers are wanting to negotiate.
Let’s first talk about what would be some good reasons to sell first and then buy:
Negotiate Your Terms
First, by selling before you buy, you get to take your time and do not necessarily have to take the first offer that comes along. You have the ability to negotiate terms without as much pressure since you have a place to live. It is your home. Also, since you are not under pressure to sell, you often obtain a higher sales price because the buyer does not think you are desperate.
Closing Contingent on New Purchase
When you do get a buyer for your home, make sure you negotiate that the sale is contingent on you closing on your new purchase. That way if you can’t find a home to buy, you are not under any obligation to sell your home. You may be required to put a time period of 7-21 days for you to locate a replacement home or cancel the contract.
Renting After Closing
If you want to wait for that perfect home, another alternative is to opt to rent after closing. If the buyer does not require immediate occupancy, you might want to request to rent back your home for the amount of the buyer’s new mortgage payment. One other choice is to move out, put your belongings into storage and rent a furnished, short-term apartment.
An Offer You Can’t Refuse
If the deal is too good to pass up, it may be especially good to buy before selling your home. There could be a number of reasons that the sellers are extremely motivated to sell, and you might want to be the first offer before word spreads across town. In this case it makes sense to buy before you sell, because the money you make walking into the deal is worth making double payments until your home sells.
If a seller is not willing to accept a sale-contingent offer, you may want to then consider if your home could sell soon enough for you to be able to close on the new purchase or look for alternative financing.
Each sale faces different circumstances and it is not always easy to know what is the right choice. If you gather enough information, you can be comfortable in negotiating your contracts to state what is in your best interest.