As part of my seller’s ought to know series, we’re going to talk about how to buy in an ultra tight market. Even though interest rates are going up, the market remains ultra tight and it's ultra tight, because there's just not enough inventory. Having said that, we've been doing this for a while, and there are definitely some strategies that you can do that are going to be successful. They’ve been successful for other people and you can do ‘em too.
Honestly in every market buying and selling is a challenge and it's not an easy thing to do, but if you want to move… It can be done! There are definitely three popular strategies, and there are some other sub-versions of these as well. You can sell your home with a home finding contingency. Right? So, basically, that's a situation where you put an offer together (on your house), but it says that you have a certain amount of time to find the next house. That's a good option. You can sell with a bridge loan. Okay. What that means is you find the house that you want and then you have a mortgage set up so that you can already purchase that house without having to have your house sold or under agreement. This tends to work really well if you're moving long distances or, you know, you've got to get out of the old house before you can get in there and fix it up, and do other stuff. So, the bridge loan is definitely a good way to do it as it reduces the timeline dependency of being able of needing to sell one before the other.
Another one is simply just to be ready to sell. Don't be sort of ready to sell, be completely ready to sell, have your house all packed up, you know, have your listing contract all set have the pictures already taken of your house. Literally be ready to put your house on the market tomorrow, right? And then be aggressive out there writing offers. But with these strategies, none of them are an obvious slam-dunk strategy. It really depends on your situation, and what you're trying to achieve. A home finding contingency in this market is going to be unpopular with interest rates going up. There aren't a lot of buyers who are going to want to give you a very long time to go look for a house. Generally, they don't want to give you a long time, anyway, so you need to be understanding that if you're going to give (the buyer’s right to pick the date) up. It's probably going to affect the price that you get on your house. Maybe in this market, not so much, but it's definitely something that is material for most buyers and could effect what you end up getting for your house.
Bridge loans have additional costs! Honestly with the prices that properties are going for, I think, bridge loan pricing is very attractive right now. And it's definitely something that I think most people should consider. The downside is not everyone qualifies, you know, if you take the expensive piece out of it, a lot of people don't necessarily qualify for it because you do - the bank does look a lot closer at your financials to make sure you carry the house for three to six months.
The third option - writing offers without knowing exactly what you're going to get for your house. It's very nerve-racking. Ultimately bridge loans and, you know, just being ready to sell, you really need to have a good understanding of pricing for your house. Some houses are easy to price, and some houses are not. In this market, the good news is, most people end up getting more than they expect. And at some point that will stop, but for the moment that has definitely been the case. That has made the move, definitely worth it.
Are they paying more when they buy? Yes, they are, but they're getting it back when they sell or most of it and sometimes more than most of it. So those have been good things to do. But with any of these strategies doing them, for the first time can feel uncomfortable. I know that a lot of my customers, you know, worry about it. At the end of the day, there aren't any risk free strategies in a tight market, right? I mean, at the end of the day, you can solve most of these problems with money, but the risk of money is a real thing. Not everyone has a lot of money sloshing around. So, you know, you have to take on some risk to kind of make it work, but you can be successful like haven't gone down these roads more than a few times. You know, I can show you sort of where the signposts are and the kinds of things you should be thinking about, in order to determine which strategy is right for you! And again, as I said, in the opening and even normal markets buying and selling is not not easy. We have lots of practice helping people do it. Helping people get the timing down and making sure that they're ready to go from house “A” house “B”. It can be done. It's a little tougher in this market, but it's certainly not impossible and really shouldn’t be something that prevents people from moving forward. Having someone who understands the strategies, where they go wrong, how they don't work. And then making sure that the paperwork that we put in place in order to protect you, so you can execute these strategies is a key part of what we do. If this is something that you'd like to know more about, absolutely reach out to me, I’d be happy to discuss your situation in detail, and figure out which one of these situations is right for you or where something else is the right strategy for you. Thanks. Have a great day.
