Timing
“When is the BEST TIME to sell a home?
Probably our #1 question over the years is “When is the best time to sell a home”? Below is our take on things.
When is the best SEASON to sell a home?
Some REALTORS® say that there is a definitely “right” and “wrong” time to sell. We disagree.
Our general advice on timing is this: buy or sell whenever the timing is best for you. Are there more buyers out in springtime? Sure, but there are also more properties for sale to compete with. Fall is often a great time to sell as well, as there are fewer properties to compete with and fall buyers tend to be serious buyers.
Maryland’s economy is such that we have people moving in and out of state all year long, so “seasonality” has less of an impact here than in other regions. Many times economic factors – like mortgage interest rates, unemployment level, election cycles, general economic mood – will outweigh seasonality factors. Spring 2009 (after the stock market crash of 2008) was a less favorable time to sell than Winter 2007 was (before the crash).
TIMING: How to Coordinate A Purchase and Sale?
It can feel complicated and stressful to simply buy or sell a home, so doing both can feel even more so. We understand. The best way to reduce stress and overwhelm is to break things down into simple, bite-sized decisions and map out a clear path to move forward.
With a good Plan A, well executed, you can often make a purchase and sale “fit” seamlessly, so that you can move straight from one property into the other. However, since real estate often involves circumstances beyond your control (like other human beings), it’s good to build your Plan A around a backup Plan B. And for that you’ll want to decide if you prefer the benefits/risks of selling first or buying first.
Selling First. When your current home sells before your new home purchase does, your Plan B may include a combination of one or more strategies below:
- Delayed settlement. Instead of a settlement date 30 days from contract, ask the buyer for 60 or 90 days. This gives you more time to find the next home.
- Rent-Back. Possibly ask your buyer for a rent-back. This allows you to remain in your current home after settlement for one week up to two months. You pay “rent” to the buyer/new owner equal to their pro-rata costs on their new mortgage. (It’s like paying a “convenience fee” for having a bit of overlap between the date you sell and the date you have to move out).
- Home of Choice. Some buyers (not many) may agree to a home-of-choice clause, where they give you, say, up to two weeks to secure a purchase contract on your next home, otherwise you have the option to cancel the sale to the buyer.
- Temporary Storage/Rental. You always have the option of putting your things in storage and taking a temporary rental until you locate and buy your next home.
Buying First. When you wish to buy the next home before your current home is sold, your Plan B may include a combination of one or more strategies below:
- Contingent-Offer. You can ask a seller to accept a purchase offer that is contingent on the sale of your current home. (Sellers won’t always agree, especially if it’s a hot market).
- Extended Settlement. Rather than settling in 30 days, ask the seller for 60, 90 or even 120 days to settle. This can give you extra time to get your current home sold.
- Buy First, Sell Vacant. Not a strategy for every seller, but sometimes it’s best to sell your home vacant. That can be true, for example, where your family situation is such that the inconvenience of lots of buyer showings while you are still living in the home is just too much to handle. Or when you’ll have extensive repairs/updates to make to your current home, and you just don’t want to live with the all the dust-and-fuss.
- Bridge Loan / HELOC. Banks no longer do “bridge” loans per se (temporary loans against equity of one home to fund the next purchase). However, you may be able to get equity out of your current home with a Home Equity Line of Credit (“HELOC”) and use that money as down payment on the next home. Note: if you wish to have this as an option – do not put your home on the market until the HELOC loan is already in place.
As always, free to contact us when you have any real estate questions, about timing or anything else. Call 410-935-0386, or email [email protected]. Thanks!