Owning a home in a seller’s market presents some unique challenges. On the one hand, your home may be worth more now than ever. On the other, if you choose to sell your current home and buy a new one, you will face stiff competition.
High prices and bidding wars are likely to await anyone looking to buy in today’s market. So, should you sell your current home first? Or start by buying a new one? There are different paths to take depending on your situation that can allow you to make the most of your home’s market value and find a new one that meets your needs.
Before you even think about selling your current home, you need to make sure there’s something better out there to replace it. The perfect time to sell your home relies more on your financial and lifestyle situation than the state of the market. Just because your current one is about to sell, you never want to feel rushed into buying a subpar home. Instead, browse through your options!
Wait until you find something that appeals to you before beginning the selling process. Once you are ready to sell, there are several approaches you can take to buying and selling in a seller’s market.
1. Buy Before Selling
In this scenario, you’re likely to enter a bidding war when you put that offer on your new-found dream home. In this case, it’s best to make an offer with as few contingencies as possible. This means that, as tempting as it is, it may not be the best course of action to make an offer contingent on the sale of your current home.
2. Sell to an iBuyer
Services such as an iBuyer or Raveis Purchase are another way of going through the buying and selling process in the real estate industry. It offers speedy technology that can make your experience convenient. If you do find a home that you’re interested in before selling your current one, consider these services for a speedy sale. You can usually close 10-60 days after accepting an offer from one. You can also get an all-cash offer, which gives you an edge in purchasing your new home.
3. Sell First
As a homeowner in a seller’s market, you have the upper hand. Buyers are likely to be willing to offer incentives to close the deal, and may be willing to be flexible on timing so that you can find a new home to purchase after selling your current one.
You could also request a rent-back agreement, which allows you to rent your home from its new owner for a specified amount of time. This gives you some time to move into your new home.
4. Make a Contingent Offer
While having fewer contingencies does give you an edge in a seller’s market, that doesn’t mean you can’t consider making a contingent offer. You just need to make the offer as strong as possible. If you make an offer contingent on selling your current home, consider offering above the asking price, paying for repairs, and putting down more earnest money.
5. Rent Out Your Home
Consider renting your current home. In a seller’s market, you’ll likely find renters willing to pay more than your monthly mortgage. This allows you to build equity in your home while someone else effectively pays your mortgage for you. Be sure to consult with a lender first to make sure that renting your home is a viable possibility.
6. Wait to Buy
You may feel pressure to move into a new home as soon as you sell your current one. However, don’t forget that renting is an option as well. If you opt for renting a home for a period of time, you can save your money for when the time is right to buy. Though moving twice in a short period of time may seem unappealing, it could be worth it to remove the stress of finding a new home immediately after selling your current one in a competitive market.
Bottom Line
There are different approaches to selling and buying in a competitive market depending on your situation and preferences. Talk with an experienced agent to determine which approach will work best for you.