Blog Buyer Want to Buy a House, But Need to Sell One First?

Want to Buy a House, But Need to Sell One First?

By Erika George & Kari McGee, February 5, 2019

After four long years, the Portland real estate market is now right for those homeowners who want to buy a house, but need to sell their current home as well. In real estate lingo, they’re called “contingent buyers.” If you’re considering how to sell and buy a house, we’ve outlined four options to help you make the move. We’ve helped many Portlanders sell their current home and move into their dream house.

Why is 2019 a great time for contingent buyers? The Portland real estate market has changed, and we’ve entered a balanced market for the first time in four years. That means buyers have more leverage, including contingent buyers. (We do a deep dive into 2019 buyer trends in our post Is 2019 The Right Time to Buy a House?)

Before we outline your four options, remember that the HouseLovePDX Team provides free consultations and market analysis. Don’t hesitate to give us a call and arrange a time to go over your options in person or over the phone!

 

Option 1: Shop – Buy – Sell

This is a classic contingent offer:

  1. Shop for your new dream home
  2. Make a “contingent offer” to the seller – the offer is contingent on the sale of your current house
  3. Seller accepts the offer
  4. Sell your current house
  5. Move into your new home

Sellers may be wary of contingent offers because there is more risk compared to a traditional offer. (If for whatever reason you don’t sell your current house, then the deal is off.) Some sellers won’t accept a contingent offer. In the past, sellers had more leverage than buyers in the Portland real estate market, and they tended to reject contingent offers. Happily that’s not the case in the current market.

When you’ve made a contingent offer, it’s crucial to sell your house as soon as possible. You don’t want to be sitting on the market for two or three months. Preparing ahead to sell your house will make your contingent offer as appealing as possible to sellers.

 

How to Prepare Ahead for a Contingent Offer

Preparing ahead for a contingent offer is similar to preparing to sell your house in general.

  1. Free Consultation and Market Analysis

We provide a free consultation, including a professional marketing analysis of your current property. We’ll establish your house’s price point, and how much you can expect to get in terms of your net proceeds. This will give you a price range when you’re house hunting for a new home.

  1. Recommended home improvement projects

We’ll provide a list of prioritized home improvement projects to help increase the value of your home. Not everyone can – or wants to – invest in home improvement projects. That’s not a problem! What’s important is pricing your house right to sell it after you make a contingent offer on a new home.

  1. Create Marketing Plan and Stage Photography

We will create a marketing plan and stage photography that will show your house in the best light.

When you find your new dream home and make a contingent offer, we show the seller your marketing strategy, pricing strategy and beautiful photos. This assures the seller we’re ready to sell you house, and can provide the confidence needed for a seller to accept your contingent offer.

As soon as the seller accepts your offer, we’re ready to get your house on the market within 24 to 48 hours!

 

Option 2: Sell – Shop – Buy (Or Plan B)

We call this the “Plan B Option” because you must have a plan B arranged in case you don’t sell your house in time:

  1. Sell your house
  2. Shop for your new home
  3. Either buy your new home or move temporarily into your plan B option

Plan B can be an apartment, or living with your parents or in-laws.

You’re already under contract to sell your current house, so you’re in a great position when shopping for your dream home. However, it’s important to do some research and make sure there is enough real estate inventory to choose from, i.e. other houses for sale within your price range and with the characteristics you’re looking for. You will need to shop for a new home relatively quickly.

The risk in this situation is that if you haven’t closed on your new house in time, you have to move into your plan B temporary housing.

Although it’s crucial to have a doable plan B arranged, so far we’ve always managed to get our clients into new homes before they’ve had to move to their plan B. (Moving back in with your parents seems to be a very motivating factor!)

 

Option 3: Bridge Loan

A bridge loan provides financing for a downpayment on a new house. That means you don’t need to sell your current home in order to purchase a new one. Like all loans, bridge loans are based on several factors, including your income and credit, and loan-to-value ratio. We can put you in touch with excellent loan officers who can provide detailed information on your unique circumstances. (Erika used a bridge loan to buy her last house, so she can speak from personal experience as well.)

If you qualify for a bridge loan you can:

  1. Shop for your new dream home
  2. Make an offer on a new house, financed with the bridge loan
  3. Move into your new house
  4. Prepare your old house for sale
  5. Sell your old house

The major benefit of this option is you can wait to sell your house until after you’ve moved out. You don’t need to worry about moving into temporary housing and then moving again. If moving twice is something you want to avoid (think: children, pets, home businesses, lots and lots of packing) then a bridge loan may be a great option for you.

However, from a financial point of view, you will need to be able to pay two mortgages until your sell your old house. Not everyone has to make double mortgage payments, but you need to be able to afford it for the time it takes to sell your old house. Additionally, the selling price of your old house isn’t set in stone, so there’s some financial uncertainty.

In a best case scenario, you sell your current house quickly and avoid paying double mortgage. On the other hand, you may not be able to sell your house for six months, ten months or more, depending on the market. In our free consultation and market analysis, we talk to prospective clients about what they can realistically expect. If you are considering a bridge loan, you want to be confident that your property will sell quickly.

We understand that no one wants to pay two mortgages, so we will work with you to get your house sold quickly.

 

Option 4: Sell – Rent – Buy

This is a great option for people who want total financial security and don’t mind moving twice. If you want to make sure you have the money in the bank from your house sale, and you want plenty of time to shop around for your dream home, then this is a great option for you.

This option is straightforward:

  1. Sell your current house
  2. Move into temporary housing
  3. Shop for your new dream home
  4. Buy your new house

Kari went this route when she made her last move. This option gave her time to shop for the right house. There was no rush to buy a new house quickly.

There are pros and cons to each of these options. We’re happy to discuss your specific circumstances in detail. There’s no reason to wait – it’s time to move into the right house for you and your family! Call us for a free consultation at 971-322-6612 or email us at karianderika@livingroomre.com.

Kari + Erika

Principal Broker & Broker | Esquire

The HouseLovePDX Team fuses comprehensive real estate knowledge and legal expertise in the dynamic landscape of Portland, Oregon.

Realtor Erika George brings to the table 20 years of experience as an attorney specializing in construction and contracts. Principal Broker Kari McGee has helped clients successfully navigate the evolving Portland real estate market since 2005. Regardless of the market or your particular circumstances, these highly skilled real estate agents will ensure that your goals become your reality. WHAT WE KNOW We know that real estate is not a one size fits all endeavor. It’s easy to find real estate data on the internet these days, but it’s what we do with the data that counts. HouseLovePDX provides a thoughtful and proactive analysis of current market data for every one of our clients. We know that small details can make a big difference. We consider factors you may not be aware of when buying a house, selling a condo or planning an ADU. From open permits to missing credits on escrow statements, these issues can cost you money. Let us guide you through the real estate process, from big picture dreams about your future home to the nitty gritty of contract negotiation. We know that your “why” often comes before your “how” in real estate. We take extra time with our clients to fully understand all the reasons why you want to make a move to, from or within the Portland area. We use this insight as the key to develop a comprehensive plan for you. Don’t be surprised if we start our meetings by delving deep into your real estate knowledge, your past experiences, your goals and your dreams! WHAT WE LOVE It’s a privilege to help a client sell a beloved home and move on to the next chapter of life. We love seeing Portland, neighborhood by neighborhood, through the eyes of someone who is new to the area and full of excitement. As Northwest natives who grew up together (we’re cousins!), our love for Portland runs deep. And we adore the the moment when a buyer walks into a house and we all know it’s the one: aka HouseLove! We would be honored to help guide you through your changing real estate needs in Portland Oregon. CONTACT Erika George and Kari McGee 503.349.5449 | 971.322.6612 karianderika@livingroomre.com
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  • T: 503-349-5449
  • F: 503-961-8224
  • karianderika@livingroomre.com

Kari + Erika

Principal Broker & Broker | Esquire


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