I am currently working with a client now who wants to sell his home and buy another one. Like many people, he doesn’t want to sell his home and not have a home of his own. BUT… in a market with limited inventory AND ready buyers, a purchase contingent on a sale is just simply not competitive.
This is true for the current market. As interest rates increase, things may change, but in today’s market, if you want to be a competitive buyer, you need to have your financing in order and be prepared to act quickly when a home you love becomes available.
What does it mean to have your financing in order? You have different options. At the very least you should have a pre-approval from a reputable lender. Be aware that it is not uncommon for a seller to ask for you to “cross-qualify” with a lender that they know and trust. This isn’t always to try and get business for their lender, but simply to confirm that the financing that you are indicating that you will be obtaining is doable. If you are working with a reputable lender, as a courtesy they will often talk to the other lender on your behalf — and with your permission — share your information.
And always — when starting the process — talk to multiple lenders. Your bank, a credit union, a mortgage lender. All of them are going to have different products and different processes. Yes, all of them are going to ask for similar information but rates, terms, and servicing will vary.
If you are purchasing with cash — make sure that it is accessible and that you have a current letter from your bank verifying the assets.
If you do have a home to sell — at the very least, you should have it on the market and be working with an agent who is trying to help you get your home sold. You should be having active showings — otherwise either your price is too high — or you have some other condition unfavorable to buyers.
If you are selling and can wait until your home is in escrow — that will be even better. Ideally, be past the contingency period and have a signed contingency removal from the buyer of your home.
The best case scenario is still going to be to have a closed escrow and cash in hand. If you can move into a short term rental — or even retain possession of your own home for 3-6 months after closing, you are going to be much more competitive than someone who knows they have to sell but haven’t even put the sign up.
I am always available to talk real estate! If I can help you with a question, please ask!