Real Estate: Selling with nowhere to go

Having a home that sells in a matter of days sounds great, until you realize that once it sells you will become a buyer in that same competitive seller’s market. To make matters worse, you have to submit your offer with an added contingency of your home selling first, which makes it less desirable to sellers. And you only have 30 days before you have to move out.

So, what can you do to avoid becoming homeless?

You could sell your home and move into a short-term rental while you search for a home to buy. This requires you to move all your belongings twice, which is not very convenient, and unfurnished, short-term rentals are very difficult to find. Out of the 66 homes for rent on the MLS in Maricopa today, how many will accept a lease of less than 12 months? Exactly zero.

You could try to find a home to buy first before listing yours. While this sounds like a simple approach, it’s the hardest to execute. Sellers are not likely to accept your offer and take their home off the market with no idea if or when yours will sell.

A better option is to try to get a contract on your current home first and ask for a longer closing period. In Maricopa, the typical escrow takes about 30 days. If you negotiate a 60 day close, that would give you time to get under contract on a home to purchase, and you could close simultaneously.

Or, if the new owners aren’t in a hurry, you could negotiate a lease-back, where you live and pay rent in the house you just sold, thereby giving you some extra time to find your next home. Most buyers, however, are not very comfortable with this scenario. And if they purchased the home with a VA or FHA loan, which requires the home to be a primary residence, there may be restrictions with the buyers collecting rent from you.

Another option is to sell your home to an investor. This usually results in the lowest amount of stress, however it comes at a steep cost. By the time all their fees are subtracted you will net about 3-5% less than if you sold it on the MLS. With the average home price in Maricopa approaching $400,000, it means you are paying up to $20,000 to avoid some short-term inconvenience.

Recently I discovered a newer solution that makes a lot of sense. I partnered with a company called Homelight that has a home “Trade-In” program. For about a 1% fee they will make a non-contingent cash offer on the house you want to buy, close on it, let you move in, and then I will list your house for sale once it’s vacant. This option eliminates a lot of the stress and uncertainty that comes with trying to buy and sell.

It’s a challenging time to be navigating the real estate market. But, having a plan, and a good Realtor, could be the difference between having a place to stay during a difficult transition, or being forced to live in a hotel, or even worse, your car.
Dayv Morgan is a Maricopa Realtor and owner of HomeSmart Success.

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This sponsored content was first published in the April edition of InMaricopa magazine.