What Do You Do When You Can’t Find a New Home?
Being in-between homes is more common than you think — and I have a plan if it happens to you.
At first, it sounds like a problem any seller would love: Your home sold after only days on the market. After all, the fear of a property lingering on the market, enduring possible price cuts, or low ball offers is what keeps many from selling in the first place. While a quick sale is a reason to celebrate, the challenge is when it happens before you can find a new home.
This is an increasingly common situation in our current market, which remains hot due to the continued limited inventory that started in April 2020. Though inventory may start to increase later this year, there’s a conundrum. For every home listed, another home has to be bought. Until inventory outpaces demand, securing your next home might likely take a little longer than anticipated.
Still, the upsides of a speedy home sale outweigh the inconvenience of possibly being in-between homes: Less drama, achieving your asking price (or more), and being able to consider multiple offers to find the best buyer for your house. I can help you plan ahead by following these strategies before you list.
Ask about a reverse contingency clause.
A reverse home sale contingency is a clause in your contract that essentially states that you won’t finalize your home's sale until you find a new home. Ordinarily, buyers find such clauses to be off-putting because it creates a lot of uncertainty in their own timelines. However, when demand is very strong like it is now, there may be a buyer out there who has a more flexible timeline for their move. (For instance, a family in the market for a home but doesn’t want to move until the new school year starts). We'll discuss it together to see if a clause would make sense for you.
Entertain Post Closing Possession.
A similar clause in the contract to above, however post closing possession actually allows you to rent back your own home from the new buyer after closing. This is a nice option for 2 reasons, you don't have to do a double move and you can close on your home which allows you to be a non-contingent aka more desirable buyer for the home you will be purchasing. Again, not all buyers will agree to this, but this has become a more common option recently that can be discussed during negotiations of a contract.
Talk to your mortgage lender first.
Do you qualify for a bridge or home equity loan? Can you qualify for a new home without selling your current one? One of the reasons sellers panic about being in-between homes is dipping into their savings to cover the unanticipated living expenses, especially if the sale is pending on their current place. A bridge loan is a short-term loan that can cover you in this instance. (It can also add to your home purchasing power, in case that opens up more options to consider buying.) The downside is that these loans often have higher interest rates and quicker repayment periods. Do the math and read the fine print to see if this makes sense for your situation. Need some advice? Let's connect.
Look for a “vacation” rental, extended stay or corporate housing.
AirBNB and VRBO offer great short term rentals. While the vacation rental market is starting to pick up as travel rebounds following all that 2020 brought, these rentals weren’t going as quickly as annual rentals. In other words, there are more options to be found, often at prices lower than they’d traditionally go for. Look out for deals for off-peak rentals or contact the owner for long term rates. Another option is corporate housing since they typically offer more flexibility as you settle into your new area. A third option is extended stay hotels. Many offer free daily breakfast and kitchenettes to make some meals. Bonus feature, you have a maid throughout your stay! All of these options tend to be furnished, so if your furniture is in storage until you're able to buy your new home, you'll be comfortable the whole time.
Add rentals to your home search.
Yes, you should look at the complexes in your area to get a sense of their availability and price, just in case. I have great insight about our local market and connections to agents to specialize in rentals — and not just homes for sale. Additionally, some of my clients may be on the fence about listing their home. They may consider a rental arrangement, be former buyers who purchased multi-family homes. Which brings us to…
Hire an agent with connections.
When it comes to securing a new home in a limited inventory market, sometimes, it comes down to having an agent who knows how to leverage their connections. As your real estate agent, I'm prepared to tap into my database of potential sellers in the areas that you're considering buying. From there, I'll have conversations with each interested seller and set appointments to preview their home for you. If we can help find potential homes to showcase to you so that we're not only helping you sell your home but ensure that you can buy a home as well, I will.
When you’re putting your home up for sale, it’s easy to let anxiety take the wheel. The fear of selling your home before lining up your next home is one of those worries that commonly come up when the market is hot. However, it’s also one with a few easy solutions — and depending on your unique situation, I may have even more creative ideas depending on your market. You never know if such a scenario may be a blessing in disguise, too. Just think, next year at this time, you may be sitting pretty in an affordable vacation rental in a fun destination, taking your time to find your dream home.