Email Elizabethbuying and selling at the same time
About Buying a Home Before Selling a House in Sacramento
It is very doable to pursue buying a home before selling a house in Sacramento today.
For some lucky sellers, it is definitely possible to pursue buying a home before selling a house in Sacramento. How one goes about this depends on basically two things: the type of real estate market you’re in and your financial ratios. At the moment, we are experiencing a strong seller’s market in Sacramento. This means sellers are in the driver’s seat. We have low inventory and high numbers of buyers. It’s the principle of supply and demand at work.
Sure, we have buyers who say, my house is so beautiful, it will sell right away, so why can’t I look at buying home before selling? As Sacramento Realtors, we have to bring these buyers into reality. Move them outside of their own situation and get them to look at this through the eyes of the seller. I say to them: Ok, pretend YOU are the seller of this house and YOU have 5 offers. Four of those offers are from buyers who don’t have a house a sell, they have no contingencies. They can get a loan and close right away. And then there is YOU. You who have not even put your home on the market, and you who wants the seller to wait while you get around to it.
If you were the seller, whose offer would you take? The buyer who is ready to go into escrow and doesn’t have a house to sell? Or the buyer who has a contingency to sell her home first and doesn’t have an offer yet? Buyers stare at their feet, shuffle toes in circles. They draw their own conclusion: Um, I guess the other buyer’s offer? Right! So, why do you think the seller will want YOUR offer, an offer that could blow up in their faces? I hate to be the bad news messenger, but there it is.
If you’re thinking about buying a home before selling, you’ve got to see this from the other side to understand.
Now, say you’re in escrow already with a buyer on your house. The seller’s listing agent will want to know if that buyer has removed contingencies. Until that happens, there is no solid commitment. If you’re just gone into escrow, the buyer has by contract default 17 days to change her mind. That’s still an iffy proposition to a seller who has offers from buyers without a home to sell.
We’ve been working with quite a few buyers lately who have had homes to sell but decided in this limited inventory market that they might sell their home without finding another home, which they don’t want to do. They don’t want to be homeless. I don’t blame them. So, for them it makes sense to focus on buying a home before selling a house. Conventional wisdom says to do it the other way around, just so you aren’t tempted to dump your old house for peanuts. Contrary, in a strong seller’s market, the risk of that happening is very low to nonexistent. The hard thing is finding another home to buy. You can leave the sale up to your Sacramento Realtor, a listing agent like Elizabeth Weintraub, who concentrates on sellers and maximizing their bottom-line profit.
If you have good credit and the financial means to carry two mortgages at the same time, you can look into buying a home before selling. Bottom line, all sellers need a place to go. That’s the first question I ask people who are selling. Where will you go? Because if you’ve got no place to go, you’ve got no good reason to sell. This way, sellers are assured they will get the home they want by buying that home first.
Making a Contingent Offer When Your Home is Not Yet on the Market
Few sellers take a contingent offer seriously if the buyer’s home is not for sale.
If you don’t eat yer meat, you can’t have any pudding. It’s not just Pink Floyd who says, among other disturbing insights, there is a certain order to the world if you want to get things done. If one can’t abide by customary procedures, then there could be ways around it, which is often my specialty as a Sacramento Realtor. To operate within the confines and restraints of a system with the goal of discovering a loophole designed to bestow an advantage for clients, while minimizing risk. And a contingent offer certainly falls within those parameters.
Part of that success means I need to know the residential purchase agreement inside and out and all of the accompanying documents. You won’t find me at a loss for words when a client needs advice. It might be complicated, but I’ll give it to them straight.
I wonder what other agents tell their clients? When I receive a contingent offer from a buyer’s agent in a pre-acknowledged multiple-offer situation without any preface, just: here it is, it makes me wonder. First I check to see if the agent showed the home. Nope, not that I can determine. That would mean the buyer probably came through a Sunday open house and then called his agent after being informed all offers would be considered immediately thereafter. Yet, why would a buyer submit a contingent offer when the buyer’s present home was not only not in escrow but not even on the market?
Having posed that question, let me add that I am sometimes lucky enough to get a contingent offer accepted for a home not on the market when we’re working with buyers, but we don’t just dump the offer on the listing agent without an explanation. We also produce an MLS number for the contingent property and explain our extensive marketing system. We give the other listing agent a solid plan to pass on to her seller. Then it’s no skin off the seller’s teeth to accept our offer because that listing can remain in active release clause.
Giving a listing agent a contingent offer subject to selling a home when said home is not even on the market is like Wimpy: I’ll gladly pay you Tuesday for a hamburger today. It’s like saying: if I could afford to buy your home, I most certainly would, Ollie, and flipping your tie around. Such a thing can make you feel like you’re Bojack Horseman, trying to explain to Princess Carolyn that her date is really 3 little boys stacked on top of each other under a trench coat.
Winter Months for Sacramento Real Estate Offer a Window
There’s a hard rain gonna fall, and I’m not talking about the drought in Sacramento but am instead focused on the real estate market coming up over our winter months. Some people are likely on the fence about whether this is a good time to sell and also buy a home. They wonder whether spring would be a better time, when there is typically more activity, more inventory and higher prices. There is one thing you probably haven’t stopped to consider: interest rates.
Interest rates will lead the real estate market next year in 2015.
When the Fed stopped buying bonds, that’s the long-awaited signal that interest rates will begin to rise. Rates have been artificially suppressed for years. They’ve been held down to stimulate the housing market and the economy but we’re just sitting on a ticking bomb. Sooner or later we have to lift our big fat butts off the rates. 2014 rates are already ahead of the average annualized percentages from 2013. And they will continue to go up.
People forget what a normal real estate market is like. They forget when 9% was considered a very attractive interest rate, or maybe they weren’t born yet. As a real estate agent, I have worked through real estate markets in the late 1970s when interest rates hovered at 18%. Interest rates have a huge affect on a home buyer’s purchasing power. Buyers are often too focused on sales prices when they should also pay attention to interest rates.
If a home seller waits until spring to sell her home and buy another, she might get a little bit more for her existing home, but that upleg, her new home, if she’s moving up, will also under those circumstances cost her more. There is no tradeoff there. Economists are predicting a slowing market for next year with appreciation edging toward 4% to 5%, if we’re lucky. If not, prices might remain stable.
But the one thing that is more likely to move than anything else is your interest rate. Consider this, every 1% increase in an interest rate will roughly lose a home buyer about $25,000 of purchasing power. A 1% bump means you may no longer qualify to buy that $300,000 home and must consider those in the $275K range. It’s not like the old days when you could wait for rates to fall and refinance at a lower rate. Those days are gone. Your window of opportunity is today.
