By Kathy Henne
Contributing columnist
It’s a common predicament: you need to sell your home and at the same time buy and move into another home, possibly in another city. Since it’s not likely that you’ll close on both homes in the same day, how do you proceed? Buy first or sell first? It’s a classic chicken or the egg scenario.
If you sell first, you will need to be prepared to move into temporary quarters until you find your next home. But if your facing something like a job relocation, you may not have a choice. If you buy first, you need to be prepared and qualified to pay two mortgage payments at the same time. But if you can’t afford two payments, you’ll probably have to sell first to qualify for your loan.
You may decide to proceed with a contingent contract wherein you make an offer on a home that is contingent upon selling your current home. Experience has shown, however, that sellers will not be enthusiastic about such an offer. With the contingent contract the seller is actually giving you a 24 or 48 hour First Right Of Refusal. If the seller accepts another offer that is not contingent upon the sale of another home, you will be given a window of 24 or 48 hours to make a decision to either go ahead and purchase the home within the terms of the contract or to step aside and let the other buyers proceed with the purchase. If you decide to go ahead and purchase the home and release the contingency on the sale of your home, you need to be preapproved with the bank for both payments. You should have this preapproval taken care of at the beginning and not wait until you are notified that the seller has accepted another contract and your 24 or 48 hours have started. Your 24 or 48 hour window could be a Saturday or Sunday and you may not even be able to contact your loan officer.
Your best bet is to go ahead and list your home for sale contingent on finding your home of choice and start looking at other homes. When your home is under contract, you can make an offer on your new home contingent on your current home closing. You can make a great offer and move into your new home. This way you won’t suffer the heart ache of getting knocked off the house you’ve fallen in love with.
Contact the Kathy Henne Team Re/MAX by calling 937-778-3961
