Sellers: What to Do When You Can't Find a Home Before Yours Sells
Did you sell your home so quickly you're worried you can't find a new home in time? See how one woman solved the problem.
I do a lot of cardio -- 1 hour a day, 6 days a week. And I’ve done a lot of house hunting -- some weeks I show as many as 75 houses. Never in a million years did I think the twain would meet. But after a client of mine recently sold her house way sooner than we expected, before she’d found another, we literally invented the sport of cardio house hunting.
Once upon a time, it was so easy to get a mortgage and sellers were so certain they would get over asking price that everyone I knew did this when they decided to sell:
- pulled some cash out of their current home on an equity line of credit -- used some of the funds to really get the place in perfect shape, put some in the bank and used the rest to make the down payment on their next place
- found and bought their next place and moved in
- then put their vacant, perfectly staged old home on the market
- fast forward a month or two -- multiple offers, tens of thousands over asking, fait accompli
Needless to say, those days are long gone. Now there’s no equity, so no equity lines to be had. No one knows for sure whether or for how much a place will sell and certainly not how long it’ll take, so smart folks without trust funds are waiting to buy until their current home sells.
The Client. And that’s what this gal was planning to do. Her home was lovely and in a great neighborhood, but we’d seen other beautiful, well-located homes nearby take months to sell, if they sold at all. So we just priced it as well (i.e. low) as she could afford to, kept a lid on our expectations, crossed our fingers (and eyes) and put the place on the market. We figured we’d have plenty of time to hunt for the perfect next home while this place was on the market. What we didn’t figure on was getting three offers within the first 10 days her place was listed!
Of course, she accepted. Not the highest offer, but the one with the most qualified buyer, after a counteroffer to get the price up a little bit. We also asked them to extend their 30-day escrow by another 30 days, so we could have more time to house hunt, but they’d heard horror stories about loan guidelines changing and strongly preferred to close as planned.
The Workaround. We did get them to let my seller rent the place back from them for up to 30 days after escrow at the same amount they were paying for mortgage and taxes during that time.
And the race was on. We looked at every flipping 3 bedroom/2 bath house (and some 4 bedroom/1.5 baths and 2 bedroom/2 baths with bonus rooms, etc.) on the market in her price range within a 15 mile radius which, in the Bay Area, spans about 6 different cities. We looked at individually owned homes that needed updating and we saw pristine places in move-in condition. We viewed foreclosures and even looked at a couple of homes that were up for auction (though we avoided short sales because we didn’t have time for all that drama).
We started looking at Spanish/Mediterranean style homes, but ended up looking at Tudors, Craftsman bungalows, ranchers and even the odd Victorian. We saw big houses, small houses, houses with yards, houses without, houses with garages, houses with mother-in-law units. Here a house, there a house, everywhere a house house. We looked on Saturdays, Sundays and even some afternoons during the week when she could sneak away from work. We made an offer here or there, but either got outbid or had these excruciating long waits on answers from asset managers on the bank-owned properties, some of which never even came.
The Result. She finally found the one, bizarrely enough given the tech-savvy search methods we’d been using, because a sign went in the yard near her sister’s house. And it was, as the right deals tend to be, a smooth purchase, though she did have to ask for an extra week’s rent-back to get all the way moved. But she didn’t have to come move in with me, so I called that a good outcome. And if cardio house hunting ever becomes an Olympic sport, yours truly will be the Dara Torres of the event.