San Diego real estate blog - Peter Toner

It may sound like common sense, but if you are like most sellers, you have probably started attending open houses before you have even thought about selling your current home.

Many experts agree that you should close of your current home before committing to another piece of property. Doing this virtually eliminates the financial risk ~ this way you’ll know how much money you have for your down payment and you won’t have to arrange for interim financing.

Negotiating a sale-leaseback is also an option. This enables you to rent your home back from the buyer for a month or two while you look for your next house. Outside of that, if you can’t arrange to rent your current house, you will probably have to rent a home temporarily. It’s usually cheaper to pay rent plus moving expenses than to carry two mortgages plus taxes and insurance for several months. It is almost always better to sell your current house first, your lender may even require it if you can’t qualify for interim financing.

If you’ve already started looking for a new home and your own home is not already on the market, STOP SHOPPING and start preparing your house for sale. Here are a few steps to help you with the process ~

Know you home’s value. Speak with your realtor and have them advise you of the current market values and what your home should be listed for. Ask for a Competitive Market Analysis of the other homes that are for sale or that have recently sold in your area. Do your homework and know your market.

Get pre-approved. Know what cash you are going to get out of the sale of your current home and get pre-approved for a new loan. This will help you have a realistic idea of what price range to start looking in.

Get an inspection. Along with the advice of your realtor, make all necessary repairs and decorating changes. Clear out all of the clutter ~ make it easier for new owners to envision your home as their own.

Now go ahead and list your home !

Timing! If by the time you accept an offer you have not found a new home – negotiate a long escrow or a sale-lease back. If the buyer needs to close quickly then you can arrange for temporary housing.

At the close of escrow deposit the proceeds while you look for your next house.

If you do end up buying before you sell…………

If you end up in a position of buying before you sell, you will just have to manage the two transactions with the help of your realtor. It is possible and it is done all of the time in real estate transactions. If you have already made an offer on a new home………

Structure your offer accordingly. Negotiate to include a long escrow, or make the purchase contingent on the sale of your current home. Such a contingency is a seller’s NIGHTMARE, however, in a slower market the seller may be willing to accept the offer.

Prepare your house for sale making sure that you consider pricing carefully. You may want to think of listing at a lower price if you need to sell quickly. You may also want to offer incentives upon closing!!!!!

With the help of your realtor, find a lender to help you secure interim financing so that you can purchase your next house while your current house is for sale.

Now focus on selling your home. Help your agent in any way you can by maintaining your home’s appearance, keeping it clean and ready to show at all times.

Follow through with your purchase. If you have not yet sold your house, you may want to adjust your budget and consider a more drastic action to sell your current home.

Close ~ Close ~ Close on both sales.

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