Unless you have a guaranteed employer relocation package or a rich relative, you basically have 3 buying options when selling.
Option 1. You can start looking and on finding the home you want, negotiate an offer on condition that your home sells.
In this scenario the Seller will include a provision stating that he can actively continue to market his home. If he receives another offer, you are notified to remove your conditions and buy the home or abandon the purchase. If your mortgage approval is subject to your home being sold, you have no choice but to let the home go and your search begins again.
This approach can be discouraging if other homes don’t seem to measure up to the one you lost. On the bright side, equally good homes are available and new listings continue to appear. With patience you’ll find your dream home.
Option 2. You wait and make an offer to buy only after negotiating a sale on your home.
This is a strong preference as it gives you more leverage when making an offer to purchase. You’ll have a more accurate accounting of the equity from your sale, and you’ll be in a stronger negotiating position.
One possible down side deals with the closing date on the home you sold. Will it give you enough time to find another home? As well, will the Seller of your intended purchase be able to accommodate your required closing date. If not, will it be possible to renegotiate the closing date on your sale? Sometimes it gets a bit tricky.
Option 3. You discuss the possibility of a bridge loan with your lender.
If the lender approves, you can actively look and negotiate an offer without a condition to sell your home. Alternatively, you can make an offer with a sale condition and, should another offer comes along that the Seller is willing to accept, you can remove your conditions upon being notified.
Until your home sells you may have to carry the cost of two homes. This approach depends on one’s tolerance for risk.
A Word of Caution: Once notified of another offer by the Seller, a Buyer usually has only 48 hours to remove all conditions, hardly enough time to meet additional provisions, like a home inspection. Satisfy other conditions well before receiving notification of another offer.
With each option any number of subtle differences can occur. Let your REALTOR® help and advise you on how to best work through these nuances.
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